Preamble

The House met at half-past Nine o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Orders of the Day — Company and Business Names (Chamber of Commerce, etc.) Bill

Not amended in the Standing Committee, considered.

Clause 2

APPROVAL OF CERTAIN COMPANY NAMES

Mr. Eric Forth: I beg to move amendment No. 1, in page 1, line 21, leave out
`at least one relevant representative body'
and insert
`all bodies and persons who appear to him to have an interest'.

Madam Speaker: With this, it will be convenient to discuss the following amendments: No. 4, in clause 3, page 2, line 6, leave out
`at least one relevant representative body'
and insert
`all bodies and persons who appear to him to have an interest'.
No. 9, in clause 4, page 2, line 10, leave out Clause 4.

Mr. Forth: It falls to me to congratulate, and I happily do so, my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) on having so skilfully steered his Bill to this stage in its passage. It remains for us to give it proper consideration.
Although my current task is to explain the reasoning behind amendment No. 1, I hope that, on Third Reading, at the very least, we shall be able to explore—I was about to say again, but I do not think that we have done it yet—some of the unresolved issues that have arisen during our consideration of the Bill. I should give my hon. Friend the Member for South Cambridgeshire clear warning that that is my thinking—as I know that, with his eloquence and skill, he will be able easily to persuade me, but I shall require such persuading on one or two matters.

Mr. Andrew Lansley: Although it is a happy instance that the Bill, which I am privileged to promote, is securing support on both sides of the House, if we are not careful, a possible consequence is that each of the Bill's aspects may not be properly

considered before the Bill becomes law. I therefore hope that, in the course of today's proceedings, we shall be able to allay my right hon. Friend's concerns.

Mr. Forth: Let us not prejudge anything. Consideration is what we are here for, and those matters will undoubtedly be dealt with properly.
I tabled this group of amendments because, I confess, I have from the outset had a sense of unease about the Bill—its self-evidently regulatory nature immediately put my mind on the alert. Although it is always possible to argue that regulatory measures are not only justifiable but required, surely the burden of proof and of argument always rests on those wishing to introduce a regulatory measure, rather than the opposite.
I am delighted to see that the Secretary of State for Trade and Industry is with us today. I am sure that what I have just said about regulation would meet with nothing but support from him, as those on both sides of the House are now at one—certainly in our rhetoric—in disapproving of regulation. The irony is that we are expected today to approve a regulatory measure.
Given the principle that the burden of proof is on those who would regulate—which I do not quite accept, yet—I should like to determine whether the provisions in this group of amendments might make the regulation mechanism as open, even-handed and acceptable as possible.
The Bill states:
It is the duty of the Secretary of State to secure that the expression 'chamber of commerce' …as an expression
requires registration and the approval of the Secretary of State.
Clause 2 goes on to say:
Before determining …whether to approve the registration of a company name … the Secretary of State must consult at least one relevant representative body.
I grew alarmed at that point.
I was quite surprised, knowing him as I do, that my hon. Friend the Member for South Cambridgeshire had included such a phrase in his Bill. I should have thought that he would want to encourage the most open approach possible to the matter, and to ensure that his Bill, in dealing with the process of registration, should be able to demonstrate the widest possible basis of consultation, and therefore of support, for the operation of its provisions. The House will therefore appreciate my surprise when I saw the phrase
must consult at least one relevant representative body.
My suspicions grew. I thought, "If that one relevant representative body was the chamber of commerce itself, or the umbrella organisation"—which, today, has kindly provided us with some excellent briefing material, to which I suspect many us may refer on Third Reading, if not before, and for which we are very grateful—"what sort of openness would there be?"
I begin, already, to get the impression of an inward-looking and incestuous approach to the whole business, which makes me feel—I must confess—rather unhappy.

Mr. Tony Colman: At the beginning of his speech, the right hon. Gentleman eloquently expressed his concerns about the Bill's regulatory nature. However,


clause 4 clearly states that it is a self-regulatory measure that will be operated within the British Chambers of Commerce and the Scottish Chambers of Commerce. Does he accept that it is a self-regulatory measure, which the chambers of commerce are themselves able to operate?

Mr. Forth: Would that that were so, I should be much happier about it. Today, however, we are regulating and creating statute; and, by doing so, we are involving the Secretary of State. I am sure that we are all very confident with the current incumbent in that post, and that we have every confidence that he will use the most excellent judgment in these matters. However, the trouble with legislation is that it is not only binding on this Secretary of State, but Secretaries of State for ever and ever. I do not know whether we would have been so happy with an immediate predecessor of his or whether we will be so happy with whoever comes after his no doubt long and distinguished period in office. The Bill is not self-regulation, but regulation by statute, with a duty being placed on the Secretary of State to approve registration.

Mr. Colman: I understand that the Bill has been urged on the House by the chambers of commerce. They see it as necessary to enable self-regulation.

Mr. Forth: The hon. Gentleman and I may have to disagree. Giving the Secretary of State a duty and various powers, including the power of registration, is not self-regulation. Self-regulation would involve the chambers policing the use of the title, giving their approval—which I understand that they already try to do—and telling the world at large that if something calling itself a chamber of commerce has their stamp of approval, it could be reckoned to be okay, but if not people should be suspicious of it.
I have no problem with that approach. Indeed, I rather favour it and have tried to encourage it for various businesses. However, that is not what the Bill is about. The chambers of commerce want the Secretary of State to be involved by statute with specific powers to ensure that those whom the existing cosy collective disapprove of are not allowed in. We shall have to return to that on Third Reading. I do not want to digress unduly, but it is already clear that the cosy cartel wants to remain as it is and to provide a mechanism to avoid any thrusting, new, exciting, dynamic bodies being allowed in. That is a paraphrase of the process, but it makes me suspicious.
The amendments would make an important difference. The Bill says that
the Secretary of State must consult at least one relevant representative body.
It would be for the Secretary of State to judge who that relevant representative body was, but we all know who the most likely candidate would be, given the genesis of the Bill. I would be more comfortable with opening the process up in the way that my amendment describes. Indeed, I insist on it. The Secretary of State should consult
all bodies and persons who appear to him to have an interest".
I started to jot a list more or less off the top of my head to give a flavour of what bodies I have in mind. It did not take me very long and I do not think that it would take

the Secretary of State very long. I shall run quickly through the list of bodies that should be consulted. My wording is not prescriptive. I did not want to fall into the trap of putting an exclusive, prescriptive list in the Bill. My wording would leave the choice to the Secretary of State. Let us open the process up and make it inclusive, to use the current jargon. I shall be talking about joined-up things in a moment if I am not careful. Let us stick with an inclusive process for the moment in an attempt to attract the support of the Secretary of State and Labour Members.
Surely the Secretary of State should consult existing adjoining chambers of commerce. Any debate about the registration of one chamber immediately involves a proper discussion about the catchment area of the adjoining chambers. That emerges clearly from the helpful notes that the BCC has sent us in the past day or two. The suggested definition of the essential characteristics of a chamber of commerce, set out on page six of the briefing notes, includes the following requirements:
owned by the business community
not owned or controlled by a faction or a commercial interest
company limited by guarantee or set up by Royal Charter
representing specific territory
not a subsidiary of another company
having, in part, a public service role
9.45 am
Revealingly, the briefing goes on to say:
This definition will not form part of the Bill but the Bill will provide the backdrop for such a statement to be agreed between BCC and Companies House.
That may or may not be the case, because the Bill says that the Secretary of State will have the final word.
I should like to home in on the BCC's definition that a chamber should represent a specific territory. Surely there must be an obligation to consult adjoining chambers. If we are talking about representation or ownership of a territory, the possibility of disputes emerges. The Bill is all about disputes and their resolution. It is immediately clear that adjoining chambers with a specific interest should be consulted, not an umbrella body.

Mr. David Maclean: My right hon. Friend will be aware that one of the purposes of the Bill is to deal with chambers that take a grandiose geographical title such as the worldwide chamber of commerce of Penrith. If a geographical title could be in dispute, surely consulting a neighbouring chamber is essential.

Mr. Forth: I am glad that my right hon. Friend agrees with me. He has given a good example. He will be familiar with the idea that Penrith bestrides the world, but we might not all agree. That is the point.
The training and enterprise councils should commend themselves to the Secretary of State as bodies that can lay claim to having a representative role for the business community. They are not perfect—I am in correspondence with the Department of Trade and Industry about a brouhaha that has developed with my local TEC—but they have developed a key participatory role in the local business community. At best they perform a vital role in bringing together all the elements


of training and enterprise in their area. They should also commend themselves strongly to my hon. Friend the Member for South Cambridgeshire.
I pass rather more quickly over the Confederation of British Industry. I would not want anyone to consult the national CBI, but some of the excellent regional CBI offices, which are real bodies rather than something floating half way between here and the stratosphere, should be consulted.

Mr. Lansley: I shall seek not to interrupt my right hon. Friend on every point. It might be helpful to remind him that I referred on Second Reading to training and enterprise councils and to the TEC National Council. Clause 4 allows the Secretary of State to add a relevant representative body and might be used to add the TEC National Council to the list of relevant representative bodies, because it plays an important role when chambers of commerce and TECs come together.

Mr. Forth: Of course I accept what my hon. Friend says, but even in that typically helpful intervention he has given the game away. He is being restrictive. The Bill says one body and he says helpfully that clause 4 might allow us to add another. That is not the spirit of what I am talking about. We must open the process up and ensure that when the Secretary of State makes his important decisions he can demonstrate to the world that he has been inclusive and has asked a proper range of people so that his decision is firmly based and is less vulnerable to challenge and judicial review. My worry about the process is that if it rests solely on the existing words of the Bill, it might be vulnerable to judicial review.

Mr. Oliver Heald: rose—

Mr. Forth: Talking about the law, my hon. Friend is about to help me.

Mr. Heald: I was not going to ask a legal question. Does my right hon. Friend think that the Bill restricts the Secretary of State in his consultations? Surely he may consult with local bodies if there are complaints. The point is that he must consult the British Chambers of Commerce. Does my right hon. Friend not feel that that is the right balance?

Mr. Forth: No. In some senses, they are the last people who should be consulted because they have an interest. They are an inward-looking, inclusive group who want to defend the status quo, as does the Bill. Once again, we have an interesting dilemma in that the Conservatives—or some of us—are the new thrusting, dynamic radicals, whereas the old fuddy—duddies who want to defend the status quo are the British Chambers of Commerce and, I regret to say, my hon. Friend the Member for South Cambridgeshire.

Mr. Maclean: I do not want to follow my right hon. Friend down that route. Clause 4 defines the relevant representative bodies, limiting them to the British Chambers of Commerce and the Scottish Chambers of Commerce. Therefore, when clause 2 says:
The Secretary of State must consult at least one relevant representative body",

he is still limited to chambers of commerce. He cannot consult anyone else if he so wishes.

Mr. Forth: That is one reading of the clause, however it does say "at least". Having been a little cruel to my hon. Friend the Member for South Cambridgeshire a moment ago, I shall defend him now. The Bill says:
The Secretary of State must consult at least one relevant body",
as I suspect my hon. Friend will say when he replies to this debate.
I am hardly a third of the way through my list. If I do not get on, the House will lose patience with me, and I cannot have that.

Mr. David Heath: I am most grateful to the right hon. Gentleman and I shall not delay him long. Does he agree that widening the sphere of consultation might establish that any ambiguity in the title was only in the mind of the single respondent to consultation in the first instance and that nobody else was confused by the geographical spread of a title?

Mr. Forth: That is a helpful but typically convoluted Liberal Democrat view. The hon. Gentleman has a good point, but let me press on with my list, Mr. Deputy Speaker, before I try your patience too far.
I deliberately skipped over CBI regional offices pretty quickly. Trade associations, which are an important part of modern business life, can often play a key role in a local community. I would also add significant employers. A catchment area of a chamber of commerce may well be dominated by a very small number of significant companies that should be involved in the process.

Mr. Keith Darvill: Surely chambers of commerce are representative in the sense that in most areas companies can apply to join them quite openly. If large employers were to be consulted, the provision would impose an additional burden on them. Surely that is not the way to reduce the burden on business.

Mr. Forth: It is interesting to hear the hon. Gentleman saying from the inclusive Government Benches that he wants to reduce the process of consultation. I would be very interested to hear the Secretary of State's view on the balance between the onerous bureaucratic process of consultation and saving companies, especially large ones, from that burden. The hon. Gentleman has raised an interesting point and I should like to hear the Secretary of State's view on it.

Mr. Darvill: I am not trying to avoid consultation because the companies will be consulted through the various organisations that the right hon. Gentleman has described. The consultation will be open and on-going, but if the Secretary of State were obliged to consult large employers, for example, the detail of that consultation would be an administrative burden that I suspect large numbers of employers would oppose.

Mr. Forth: My amendment would not place them under an obligation as its wording is more flexible than that. It simply proposes that the consultation process could include the bodies to which I have referred. Of course the hon. Gentleman is right. If, as would probably be the case, large


employers were already involved in the TEC, the regional CBI or a trade association, they probably would not want to go through the process again. I concede that. I do not want to press the point and irritate the hon. Gentleman as I am asking for his support for my amendment.
In the same spirit—and it is not often that I say it, but I shall whisper it—we might even consult the trade unions. I do not want to lose the support of my hon. Friends, but as we are all friends here together this morning I thought that I might mention the unions. In many cases, they will be a relevant factor in the process and therefore should not be ignored.
I now come to the last two organisations on my list. Local authorities must have a role to play in the process given that so many of them now have economic development departments and seek to involve themselves in economic regeneration and the like.
Last but not least—and I saved this in order to make my appeal to the Secretary of State—DTI regional offices should also be involved. Having some passing but now rather historical knowledge of such matters, I remember the key role that they sometimes play, often very effectively. I cannot imagine the Secretary of State neglecting to consult the regional offices, but one never knows. Again, it seems somewhat at odds with the wording of the Bill.
Without labouring it unduly, I hope that I have made the point as forcefully as I can. I believe that the present wording of the Bill is unduly restrictive and inspires little confidence that it is sufficiently open and consultative to reassure us that it has not been designed to shore up and reinforce a rather cosy monopoly that no doubt does splendid work but is now asking us by statute to protect its existing membership and, by implication, therefore, deny the process of challenge and renewal.
I shall return to the issue on Third Reading as my hon. Friend the Member for South Cambridgeshire knows that I am worried about the non-reversibility of the process in the Bill and I should like to explore it just one more time to allow him to persuade me of its merits—as no doubt he will, given the power of his eloquence. The amendments are designed to open up the consultation process and make it more credible and more soundly based. Therefore, in my view they would make it a better Bill.

Mr. Colman: Let me first declare an interest in that I was a private-sector director of my local training and enterprise council between 1989 and last year and leader of a local authority—the London borough of Merton. In that capacity I encouraged and enabled the setting up of the Merton chamber of commerce, an excellent body that has done a great deal to enhance and advance the cause of commercial enterprises in the London borough of Merton.
As this is my first involvement in the Bill, I congratulate the hon. Member for South Cambridgeshire (Mr. Lansley) on introducing it, building on the previous work of the hon. Member for Windsor (Mr. Trend). I oppose the amendments—which I hope that the right hon. Member for Bromley and Chislehurst (Mr. Forth) will withdraw—as they fundamentally undermine the nature of the Bill.
10 am
I was concerned by the description by the right hon. Member for Bromley and Chislehurst of the British Chambers of Commerce and the Scottish Chambers of Commerce as a cosy collective. He may wish to take a different view on that, as I believe that important organisations supporting business should have that soubriquet. The Bill is not attempting to retain the status quo; the status quo is confusion, where the title of chamber of commerce seems to be up for grabs by all and sundry. There must be a statutory basis for the title, and the umbrella organisations—the British Chambers of Commerce and Scottish Chambers of Commerce—should be able to regulate themselves. The Bill will strengthen the confused situation that is outlined in the briefing from the BCC.
The right hon. Gentleman mentioned a number of organisations that should be consulted. I hope to convince him that the correct body for consultation is the BCC, as the Bill attempts to ensure the high standards that are insisted upon by that body.
I have mentioned the Merton chamber of commerce, and the London chamber of commerce provides a good range of services, as does the Croydon chamber of commerce. In my constituency, there is the Wandsworth chamber of commerce and—through contacts with the training and enterprise council for Wandsworth, Kingston and Merton—I know of the chambers in Kingston.

Mr. Forth: I have no doubt that nearly all of the chambers are excellent. However, if an inadequate, tired, old chamber was well connected by the old boy network to the British Chambers of Commerce, and a new thrusting chamber in embryo wanted to establish itself, would not the hon. Gentleman be worried that the provisions of the Bill would protect the tired and old and prevent the new and dynamic from establishing?

Mr. Colman: The right hon. Gentleman makes my point, although he does so the wrong way round. If there is such a thing as a tired chamber of commerce—a strange adjective—the British Chambers of Commerce can step in and threaten, initially, that if the chamber did not return to the mark, the title could be removed. There are few controls at present.

Mr. Lansley: Under the Bill, the circumstances in which a title can be removed are those set out in section 32 of the Companies Act 1985, where there is, rightly, a tough test for removal. That test should be whether harm would result from the continuance of an organisation using the title. I hope that the hon. Gentleman will not proceed on the basis that that would happen at all lightly.

Mr. Colman: I am grateful to the hon. Gentleman. The representative bodies to be consulted are those named in clause 4—the British Chambers of Commerce and the Scottish Chambers of Commerce. I note that others might be added, but the Bill—which has been urged upon us by the British Chambers of Commerce and others—should not be lost by producing a laundry list or organisations, as the right hon. Member for Bromley and Chislehurst did.
Chambers of commerce in my area are happy for the British Chambers of Commerce to act on their behalf, and I urge the right hon. Member for Bromley and Chislehurst to get the views of his local chambers.


As a member of my local training and enterprise council—and following consultations at national conferences of TECs—I know that TECs have urged the British Chambers of Commerce to sort the matter out; although they may not have understood the complexity of the situation. The BCC has said that it cannot, and has asked Parliament for help in sorting it out.
The London region of the CBI supports the Bill. When I represented retail interests on the CBI, there was concern about the variability of the title of chamber of commerce, and the national council of the CBI will welcome this attempt to sort that out.

Mr. Forth: Is not the hon. Gentleman giving us a list of the fat cats and the establishment? Where does the small man get his say? When will he look out from that inclusive list, with which he is complacently satisfied, and allow others to be consulted? The Secretary of State always says that he regards small firms as important. I may be pre-empting what the hon. Gentleman is about to say, but his list so far seems to be a depressing list of the good, the great and the well-connected.

Mr. Colman: The right hon. Gentleman may not realise that he makes my point again, as I was going through his list. I was going to add that, as a life member of the Institute of Directors, I am aware that many smaller companies are urging support for the Bill. I urge the right hon. Gentleman to recognise that support; I urge him also to join that body. As someone who has worked for a larger company, I recognise the determination of directors in competitive sectors of the market to achieve their results.
The right hon. Gentleman mentioned the trade unions. I declare an interest, in that I am a member of the GMB; which, I am pleased to say, is centred in the London borough of Merton. That excellent organisation supports the Bill. The views of the general secretary of the GMB will be shared across the trade union movement.
Local authorities were on the laundry list of the right hon. Gentleman. As a former local authority leader, I was in favour of a similar proposal in 1996 by the hon. Member for Windsor.

Mr. Heald: Perhaps the concerns of my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) could be met by adding, after "one relevant representative body" the words, "and the hon. Member for Putney."

Mr. Colman: I am happy to provide any advice to my right hon. Friend the Secretary of State for Trade and Industry at any time, but I am sure that he will speak from a considerably more eminent range of interests. I mention my connections only because it is important that we should speak from some point of knowledge or authority. I am gainfully employed in the House and hope that the electors of Putney will return me again and again.
The laundry list of the right hon. Member for Bromley and Chislehurst is far too long, and I would slice it down to what is in clause 4: the British Chambers of Commerce and the Scottish Chambers of Commerce. As the hon. Member for South Cambridgeshire said, if the Secretary of State, in consultation with those bodies, feels that any other body should be added, that option remains. It would

be wrong to have the all-inclusive formula in the amendment, which is far too wide and would defeat the point of the Bill.
I hope that the right hon. Member for Bromley and Chislehurst will withdraw the amendment.

Mr. Heald: It is clearly important to consider the issue of consultation, but we do so against the background of considerable success by the British Chambers of Commerce over recent years. I congratulate my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) on promoting the Bill and so effectively piloting it through the House, and I wonder whether that recent success is due to the fact that he was the deputy director of the organisation about 10 years ago.
The British Chambers of Commerce has enhanced the reputation and widened the network of chambers of commerce to the point at which about 95 per cent. of companies and businesses in Britain have reasonable access to their services, which include national and international trade, export supply and support services and information. That widened network and improved quality need to be protected.
The increased integrity and comprehensive character of the chamber of commerce network needs to be supported by the House—I think that all hon. Members would accept that—but it is also important that there should be adequate consultation before a company is barred from using the name "chamber of commerce". It would be wrong, as my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) said, if we ended up with a cosy set-up; but although the Bill contains the minimum requirement for the Secretary of State to consult one of the two representative bodies, it does not prevent him from going wider than that if there is cause for concern.
There is a danger with a wider list that one could end up with an excessively bureaucratic consultation process, with the usual suspects always being consulted on every application, even if that application is in no way controversial.
10.15 am
I know that my right hon. Friend would recoil in honor at the thought that whenever a chamber of commerce wanted to register its name at Companies House, the CBI regional office, the trades unions, the DTI regional office, and all the rest, would have to be consulted. I question whether consulting those people would answer my right hon. Friend's real concern, which is about the little guy: the thrusting new entrepreneur who wants to offer something new in the sector.

Mr. Forth: Perhaps I should have suggested a provision for an electoral or referendum process, which might answer my hon. Friend's point. I accept the thrust of what he is saying, but how often does he think the process will happen? The point about the burden, which he and the hon. Member for Upminster (Mr. Darvill) both made, has to be put in the context of the number of times the process is likely to be repeated. From all that I have read, I doubt that it would happen all that often. I see the sense of what my hon. Friend is saying, but we should not over-emphasise the burden that would be imposed.

Mr. Heald: I accept my right hon. Friend's point, but we often regulate with the best intentions, thinking that


the burden will not be significant, only to discover to our horror that a process has been set up that requires a very wide-ranging consultation when it is not really necessary, and we end up imposing burdens that we had not foreseen. I know that my right hon. Friend is one of the strongest advocates for not doing that.
I accept that we should consider the issue of consultation very carefully and not cut out the little guy—the entrepreneur—but it is possible to be too cautious about the abilities of the British Chambers of Commerce, which has established a high reputation and is seeking to improve its regulation. It would be horrified at the idea that it would want to promote a chamber of commerce that was seriously failing. In fact, I believe that it would take active steps, as the hon. Member for Putney (Mr. Colman) said, to rectify the situation.
I will be interested to hear what the Secretary of State has to say about the concerns that have been expressed, but the Opposition have welcomed the Bill and supported it throughout. We do not consider the concerns to be so serious that they need to be dealt with by means of the amendment, although we would enjoin the Secretary of State to take careful note of the points that have been made and hold the widest possible consultations when concerns have been expressed by bodies other than the British Chambers of Commerce.

Mr. Darvill: The Bill is a balanced and good measure and we should support it. I support the general thrust of the hon. Member for North-East Hertfordshire (Mr. Heald). It is important to get the right balance and I think that the Bill does that.
The amendment would tip the balance the wrong way, because there would be excessive bureaucracy and the administrative costs would be heavy on the public purse. Some of the points made by the right hon. Member for Bromley and Chislehurst (Mr. Forth) about fat cats and consultation need to be addressed—we are doing that now—but the amendment goes too far.
In my experience as a solicitor, the chambers of commerce serve the business community well. They are always looking for new members and encouraging the broader business community to get involved. I believe that the representative bodies should have their input exactly as the Bill sets out. The amendment would make the Bill too restrictive, so I hope that the right hon. Gentleman will withdraw it.

Mr. Lansley: I am grateful to my right hon. Friend for the manner in which he moved the amendment and spoke to his other amendments. His vigilance in scrutinising legislation is acquiring a certain status in the House—

Mr. Forth: That is one way of putting it.

Mr. Lansley: If I may presume to offer flattery to my right hon. Friend—not something that he ever seeks—I can tell him that I am grateful for the way in which he spoke to his amendments so as to help us to examine the Bill further. As the hon. Member for Putney (Mr. Colman) noted, a very similar Bill was introduced in the previous Session. Even when a Bill clearly pursues objectives which I trust all hon. Members will think desirable, it is

important that we should ensure that we legislate in a proper fashion; I take my right hon. Friend's point in that regard.
First, I shall explain to the House the impact that the amendments would have on the Bill, because that will help to set in context the reasons why I do not think the amendments would be of advantage, and therefore why I hope that my right hon. Friend will not, on reflection, press them.
Amendments Nos. 1 and 4 both relate to the Secretary of State's obligation to consult before approving the title "chamber of commerce" or related titles. One amendment relates to companies legislation and the other to business names legislation. There are two clauses that relate to those separate processes of approving names. That is why there are two amendments.
In each case the effect of the amendment would be the same—to take out the requirement to consult
at least one relevant representative body
and insert the requirement that the Secretary of State "must"—I emphasise the word "must"—consult
all bodies and persons who appear to him to have an interest".
Amendment No. 9 would leave out clause 4, which specifies the relevant representative bodies that the Secretary of State should consult, and gives him power to go further and add other relevant representative bodies for that purpose.
I shall tell the House why the Bill is intended to secure consultation through British Chambers of Commerce as a relevant representative body. It may be helpful for those who read the report of our deliberations to be able to see how the Bill is designed, so I must explain that section 29 of the Companies Act 1985 provides that where the Secretary of State is approving a title that is a controlled title for the purposes of the Companies Act, he can specify by order a Government Department or other body as the relevant body for consultation purposes.
There is a parallel feature in section 3 of the Business Names Act 1985. Under existing legislation, therefore, the Secretary of State is in a position to specify that "chamber of commerce" is a controlled title and further by regulation to say that his exercise of his power in relation to such a title should be by way of consultation with a relevant body.
The purpose of the legislation is primarily to entrench the position of British Chambers of Commerce and Scottish Chambers of Commerce so that the Secretary of State is required to consult them as relevant representative bodies. An important factor that has not yet come out in the debate is that the purpose of the Bill is not to prevent the Secretary of State from consulting bodies or persons whom he might regard as persons or bodies whom he should consult, before deciding whether to approve such titles. The purpose is to constrain him to consult British Chambers of Commerce or Scottish Chambers of Commerce as the relevant representative body.

Mr. Forth: Of course I follow what my hon. Friend is saying, but is it inconceivable that at some time in the future a group of chambers might decide that the representative body was no longer representative and that they needed to set up a rival organisation that claimed to be more representative? When one names organisations in


primary legislation, one sets the requirement in legislative concrete and makes it difficult for a process of rejuvenation and renewal to take place.

Mr. Lansley: I am grateful to my right hon. Friend. I can declare a past interest in that 10 years ago I was deputy director general of the Association of British Chambers of Commerce. If we had been undertaking such legislation then, we would not have specified the association alone. We would also have specified the National Chamber of Trade, as it then was. There was more than one organisation representing bodies that operated under titles relating to chambers of commerce or chambers of trade.
That thought helpfully brings me to an important point. It is not only desirable but necessary to entrench the position of British Chambers of Commerce because, in the intervening 10 years, considerable changes have occurred in the chambers of commerce movement. For example, the National Chamber of Trade and the Association of British Chambers of Commerce have merged, and there is now no body other than British Chambers of Commerce that can lay claim to representing chambers of commerce.
It would be possible, for example, for the Secretary of State to choose to specify as a relevant representative body the International Chamber of Commerce (UK), but that is not a body with the representative characteristics of British Chambers of Commerce. It would be reasonable for the Secretary of State to consult that organisation in relation to bilateral chambers of commerce, such as the British-Australian chamber of commerce or the British-Belarus chamber of commerce, or whatever, but it would not be right for him to specify that body as a relevant representative body.
Over the past 10 years, although British Chambers of Commerce has effectively brought together a high proportion of chambers of commerce and related organisations with such titles into membership of the association, it does not seek to create an exclusive monopolistic organisation. The intention throughout has been to bring members into chambers of commerce, and chambers of commerce into membership of British Chambers of Commerce, in ways that extend the network and improve the overall standard of chambers of commerce.
We should not lose sight of the fact that one of the purposes of the Bill, and of entrenching the position of British Chambers of Commerce, is further to recognise the simple fact that chambers of commerce seek not to defend the status quo but to guarantee high standards of service to business, which they are doing through the network of 60 approved chambers of commerce throughout the country.
Once upon a time, in some regions, chambers of commerce did not provide the level of service that many businesses were looking for, but now they are, because of the British Chambers of Commerce approval system. Once, the criticism of chambers of commerce was that the service was patchy, and depended where one was.

Mr. Edward Leigh(Gainsborough): That may be no bad thing.

Mr. Lansley: Patchiness of quality is to be deprecated. It is acceptable for local organisations to decide for themselves which services to offer, but it is less acceptable if when people go to chambers of commerce either in their own area or in order to trade from overseas, or from other parts of the country, they find poor service. That is why, alongside the approval system to create a network of chambers of commerce to give national coverage, every organisation should be able to say in time that it has a chamber of commerce that provides that valuable service in the private sector, and is not dependent on a grant from Government—I am sure that my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) will applaud that. Through the accreditation system and the procedures of ISO 9000, when a business goes to a chamber of commerce it can be sure of the standard that will be applied.
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It is not the intention of the Bill to provide that only those bodies that are approved by the British Chambers of Commerce can be called a chamber of commerce. Neither is it the intention that only those bodies that meet that quality standard of accreditation should be able to call themselves chambers of commerce. However, it is important that—in parallel with the effort that is being made by the British Chambers of Commerce and its members to raise the standard and extend the coverage of the system—they should have the protection that those who are completely outwith the system and making no effort to comply with the essential characteristics of a chamber of commerce cannot use the title. If such organisations were allowed to use the title, it might lead members of the business community to believe that they were dealing with a chamber of commerce. The essential characteristics of a chamber of commerce are that it is owned by its members; that it does not operate in the commercial interest of a member but in the wider business interest of the area it serves; that it relates specifically to a geographical area described in its title; and that it is genuinely representative of the businesses in that area.
The system is intended to be self-regulatory, because the chambers of commerce have pulled themselves up by their bootstraps in past years to ensure that they are bodies in which the business community and Government can have confidence. However, the process should not be monopolistic. In France and Italy, the continental system of chambers of commerce is exclusive and monopolistic. The chambers of commerce have public law status. They are creatures of statute and exercise quasi-public sector functions by virtue of statutory controls. That does not permit the competitive aspects of our system, or the ability of businesses to join a chamber of commerce and cause it to change.
British Chambers of Commerce does not want the continental system. It wants protection of title, rather than public law status—and there is a big difference between the two. The protection of title is the British way of doing things, because it will not create a monopoly or dependency on the Government. However, it will recognise that the Government have a role in preventing abuse.


I do not suggest that my right hon. Friend the Member for Bromley and Chislehurst should withdraw his amendments because they would be difficult to administer, but they would be burdensome. The Secretary of State would have to consult all those bodies that appear to him to have an interest. The list that my right hon. Friend gave consisted of all those bodies that the British Chambers of Commerce would customarily consult. There is no difficulty with individual businesses expressing an objection to or approval of an application for title, because they are likely to be members of the local chamber of commerce or know about it.
In one case, the East London chamber of commerce existed, but the East of London chamber of commerce sought the title and the Secretary of State approved it. It is a matter for debate whether, if the Bill had been in force, the outcome might have been different, but that is not my point. In those circumstances, British Chambers of Commerce made effective representations, but the then Secretary of State felt that he could not refuse title. Under the amendments, the Secretary of State would have had to consult directly every business in the geographical area of east of London, which would have been a major enterprise.

Mr. Forth: I acknowledge the force of my hon. Friend's argument, but I hope that he can put it in context. How often would consultation have to be carried out? If it were once a day or once a week, my hon. Friend's argument would have more force. However, if it were relatively infrequent, the argument against the requirement to consult would have that much less force.

Mr. Lansley: The applications for changes in title fall into three categories. The first is applications for titles for new organisations, which are relatively infrequent. British Chambers of Commerce records suggest that they occur about half a dozen times a year. In each case, major consultation is necessary. Secondly, chambers of commerce often seek to change their titles. For example, on 20 or so occasions, chambers of commerce and industry have sought to combine with training and enterprise councils and to change their names. A further 20 or 30 of those could come forward in a short time.
The third set of applications is one that we have not mentioned in the debate, because we think of chambers of commerce as bodies that represent specific geographical areas within the United Kingdom. However, many bodies using the title "chamber of commerce" operate in the trading sphere, as bilateral chambers of commerce between the United Kingdom and other countries. Sometimes there is a rush of such applications. For example, after the dismemberment of the former Soviet Union, many bodies sought to become the bilateral chambers of commerce between Britain and the former Soviet republics. That would mean dozens of applications a year reaching the desk of the Secretary of State, who would face significant difficulty if he were required to consult all those bodies that appeared to have an interest in the trade between the two countries, which would include many of the exporters in this country.
I hope that my right hon. Friend the Member for Bromley and Chislehurst recognises the excessive burdens that would be imposed by his amendments. Although the

purpose of the amendments does not transgress against the principles that he expressed in moving them, I hope that he will withdraw them.

The Secretary of State for Trade and Industry (Mr. Stephen Byers): Not for the first time, the right hon. Member for Bromley and Chislehurst (Mr. Forth) has done the House a service. He has allowed us not only to debate the narrow implications of amendments Nos. 1, 4 and 9, but to address some far bigger issues surrounding the danger of over-regulation and the tendency to which all Governments are prey to endorse the status quo and the big players already in the field which have good links with Government and can lobby effectively.
There is always an inclination to listen to the views expressed by those organisations, and we can as a consequence deny opportunity to young and dynamic organisations that are just starting out and do not have the access that established organisations enjoy. I hope to reassure the right hon. Gentleman on how the Government will operate the provisions in the Bill. I hope that he will then feel able to withdraw his amendment.
There can be no doubt that it would be a terrible mistake to introduce legislation that would prop up old and tired organisations, ensuring that they maintained a privileged position that denied opportunities to other organisations. I do not feel that the Bill will do that. The consultation provisions clearly place a specific requirement on the Secretary of State to consult British Chambers of Commerce and the Scottish Chambers of Commerce. There is nothing to stop the Secretary of State using discretionary powers to discuss matters with, or take views from, other organisations.
There is certainly nothing to stop dynamic local companies or groups of employers from making representations to the Secretary of State about any proposal. They would need to be proactive, because the Secretary of State would not seek out their views as there would be no legal requirement for consultation. However, the Secretary of State would listen to any representations that those organisations might make.
My hon. Friend the Member for Upminster (Mr. Darvill) spoke of getting the balance right. We can do so by placing a clear requirement on the Secretary of State to consult British Chambers of Commerce and Scottish Chambers of Commerce, but adding that the Secretary of State will listen to other representations that might be received. People must feel that their voices may be heard.
We must not make the mistake of putting a great burden on the Secretary of State, the Department or local bodies that would have to be consulted whether they liked it or not. The right hon. Gentleman's amendment would require the Secretary of State to consult relevant bodies, and that would have to be done whether the Secretary of State wanted it or not, and whether or not those organisations wanted to be consulted. I receive many complaints from businesses that think that we contact them a bit too much. The last thing that they want is another brown envelope from the Secretary of State or a Department.

Mr. Stephen Pound: One should never say no to a brown envelope.

Mr. Byers: I had better not go down that road, although an interesting debate would ensue if I did. The type of


brown envelopes to which I was referring would be less welcome, either through the letter box or in one's back pocket.
The right hon. Member for Bromley and Chislehurst listed the kind of organisations which he felt it would be appropriate to consult. He mentioned the TEC National Council and relevant trade organisations. He was not too keen on the Confederation of British Industry nationally, but felt that regional CBIs might be worth consulting. If he would pass on their names, I would be grateful to him, as that information would be useful. He mentioned significant employers.
The most intriguing part of the right hon. Gentleman's speech was his suggestion that we should consult trade unions. That must be a first. The fact that he also mentioned local authorities makes me think he must be undergoing a conversion. I know that he was angered by the comments made a couple of weeks ago by the deputy leader of the Conservative party about the role of the private sector and public services. The right hon. Gentleman's views have been coherently argued as a point of principle, and it is a shame that the same cannot be said of the deputy leader of his party.

Mr. Maclean: Has the Secretary of State considered that my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) may be happier today for local authorities to be consulted because more local authorities are under Conservative control and might give a more sensible point of view than, say, Sheffield would have done in the past?

Mr. Byers: The number of local authorities under Conservative control is very small, but the right hon. Member for Bromley and Chislehurst argued for a spirit of inclusivity, and it was interesting to hear from him that local authorities of whatever political persuasion should be consulted. That is certainly a first for the right hon. Gentleman. He also suggested that Government offices for the regions could be consulted, although they would be able to express a view about the merits or otherwise of a particular application in any event.
The Bill places a requirement on the Secretary of State to consult British Chambers of Commerce and Scottish Chambers of Commerce. That does not stop the Secretary of State receiving representations from other interested bodies that wish to make them. That strikes the right balance. Representations would be taken into account in any decision ultimately taken by the Secretary of State.
We do not want to support a cosy monopoly. We want to support challenge and renewal in this and many other areas of our political, social and economic life. As Secretary of State, I do not want to be seen to prop up what is old and failing while denying opportunities to those who wish to progress and succeed.
The Bill would not deny such opportunity to anyone who wanted to come forward, to challenge the status quo or to make life difficult for local chambers of commerce. Local employers and businesses can keep chambers of commerce on their toes by acting and by talking to local business representatives. We hope that that is the right way forward. The Bill strikes the right balance, and amendments Nos. 1, 4 and 9 would create a great burden

and cause confusion about the requirement on the Secretary of State to consult all relevant bodies, which would not be helpful.
I assure the right hon. Gentleman that we shall, in the light of experience, reflect on whether there is a need to add more organisations by order, as the Bill allows. Given that power and my clear commitment that representations will be considered, I hope that the right hon. Gentleman will feel able to withdraw his amendment.

Mr. Edward Leigh: As usual, the Secretary of State has dealt with the amendment with great skill and courtesy. He has given the House important reassurance, but I want to encourage my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), lest he feels rather lonely.

Mr. Forth: It's not unusual.

Mr. Leigh: Indeed not, but those who are remembered by history are often in a minority, perhaps even a minority of one. That should not stop my right hon. Friend from speaking up for his beliefs.
The amendment is no mere technical adjustment to a minor Bill as it encompasses an important philosophical point from my right hon. Friend. I support my right hon. Friend's arguments, albeit that he may feel that he should withdraw the amendment for the reasons given by the Secretary of State.
My interest in these matters dates from when I served in the Department of Trade and Industry under my right hon. Friend the Member for Henley (Mr. Heseltine), who had a particular view of the role of that Department and its relationship with chambers of commerce. He felt that, under previous incumbents, the Department had not been sufficiently interventionist in many areas and that it should have taken more of a proactive role to encourage local chambers of commerce to join together to become more efficient and effective.
As my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) said, there is nothing wrong in that. Indeed, it is true that the network has been patchy over the years. However, a warning bell sounded in my mind when I used to sit at the feet of my right hon. Friend the Member for Henley and it sounds in my mind now. There is a danger that we take a corporatist view of these matters.
As we have been told, chambers of commerce have a long history. The first dates from 1599, from the chambre de commerce in Marseilles. Therefore, we are talking about a movement that is not only 400 years old but that was mercantilist in its inception. We do not hear much talk about mercantilist politics nowadays. Perhaps I can explain what they are. Chambers of commerce were initially designed not to open up trade to all newcomers or encourage free trade, but to ensure that those who were already engaged in trade in a locality increasingly enjoyed a monopoly. I am not accusing modern chambers of commerce of being in any way involved in that sort of practice, but that was their original function.
I think that my right hon. Friend the Member for Bromley and Chislehurst is trying to feel his way towards the argument that, while he recognises the excellent work that is being done by chambers of commerce, he does not want us to develop a system that would lock them


in concrete, as it were, and which would give British Chambers of Commerce too much power to prevent new entrants coming in from the system. No one is accusing British Chambers of Commerce of wanting to do that—everyone has great respect for it and knows that it wants to create a system of chambers of commerce to provide good and adequate support to local businesses.
My right hon. Friend the Member for Bromley and Chislehurst has done the House a service in reminding us that, occasionally, organisations become a little stuffy or inward looking in their middle age and are perhaps not prepared to consider the merits of newcomers. If this debate achieves anything, I hope that the House will at least have been made aware of that point.

Mr. Lansley: I remind my hon. Friend that just over 10 years ago, at the point at which British Chambers of Commerce entered into the process of establishing an approved network of chambers with accreditation standards, it was not being given the encouragement of my right hon. Friend the Member for Henley (Mr. Heseltine) as our former and lamented colleague Nicholas Ridley was then the Secretary of State. He saw chambers of commerce as part of a body that was not corporatist in its design—he saw them as springing from the activities of local businesses rather than operating on a national basis.

Mr. Leigh: My hon. Friend has a point. At the end of the 1980s, which was before my right hon. Friend the Member for Henley became Secretary of State, Professor Bob Bennett of the London school of economics was asked to prepare a report to set out proposals for building a stronger and more credible chamber of commerce movement. Our right hon. Friend the late Nicholas Ridley was not going to stand in the way of that movement when he was Secretary of State. As much as he was fully committed to the concepts of free enterprise and new entrants to industry, he recognised that a strong and vibrant chamber of commerce movement was needed.
That is why I do not oppose the Bill—I do not think that any hon. Member opposes the point of view that my hon. Friend the Member for South Cambridgeshire is putting forward. No one is suggesting that we should allow a situation to develop in which people could set up some sort of criminal organisation, as has happened in Italy, or use the title of chamber of commerce to cover some narrow business purpose. Everyone knows that we want chambers of commerce to be strong and independent and to provide comprehensive coverage. There is no argument about that and that is why the late Nicholas Ridley was happy with the purport of the Bennett report. I doubt whether he would have wanted the proposals in the report to be taken as far as they were taken under our right hon. Friend the Member for Henley. As neither of our right hon. Friends are in the Chamber—sadly, one cannot be and the other is absent no doubt for good reasons—we do not know the nature of that debate. My right hon. Friend the Member for Bromley and Chislehurst and my hon. Friend the Member for South Cambridgeshire are both doing the House a service in trying to encapsulate the problem.
We heard a reassuring speech from the Secretary of State. Listening to him, one felt that there could be no possible concern about the Bill as drafted. After all, the
Bill requires him to consult the British Chambers of Commerce on applications. He said that he will not be held back in any way from consulting other bodies, of course, but that he does not wish to over-regulate industry or to send out lots of brown envelopes. He has said that the amendment is not satisfactory because it would place undue burdens on business and the Secretary of State. All that is fine and, having listened to the way in which the right hon. Gentleman described these matters, I am sure that my right hon. Friend the Member for Bromley and Chislehurst may be tempted to withdraw the amendment. Before he does so, he should consider this point: although we have received the reassurance today that the Secretary of State has an open mind and wants to create new and vibrant chambers of commerce if they are necessary in particular areas, what will be the reality? Who will he consult?
Once the Bill leaves this place, given all the burdens that are placed on officials in the Department of Trade and Industry, will they make an effort to consult the sort of people about whom my right hon. Friend the Member for Bromley and Chislehurst was talking? Or, will it become a cosy arrangement where, in every case, the Secretary of State lays down the guidelines as to what is a chamber of commerce as the Bill sets out, someone makes an application and, as a matter of course the right hon. Gentleman consults British Chambers of Commerce? We all know how these things operate. As everyone who has had anything to do with government knows, officials at assistant secretary level are the motor force in Departments. No doubt such an official will know the official at the appropriate level in British Chambers of Commerce. The two will have a good and cosy working relationship. They will know each other well and be on first-name terms. It will be a question of the official at the DTI ringing the BCC official and saying, "John, we've had this application. What do you think?" That is the reality of what will happen.
When it is described in that way, perhaps people can understand some of my concerns and those of my right hon. Friend the Member for Bromley and Chislehurst. What will happen if there is a dispute in a local area when an existing chamber of commerce has become tired, as inevitably happens, or even corrupt in some way? I know that that does not happen at the moment.
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I intend no innuendo against the present movement, but life being what it is, that will happen. A new group of perhaps younger business men, as has happened so often, might want to set up a rival chamber of commerce. We should not be too concerned because Companies House does not grant applications willy-nilly but consults the British Chambers of Commerce. My hon. Friend the Member for South Cambridgeshire says that that is not good enough and that everything must be in the Bill. I am not sure that that is always necessary, but that is the way we operate now. We can see the problems that could arise.
My right hon. Friend the Member for Henley would say that the way in which the movement developed in the early part of the century was chaotic. He likes things to be neat. He would not approve of the fact that there were nearly 900 chambers of commerce early in the century or that, perhaps typically, in the south of England, there were chambers of commerce while the north had chambers of trade.


I also fear that we could be inching our way towards a continental system of doing things, where the chambers of commerce are embedded in the structure of the state and chamber membership is mandatory. Membership is mandatory in Germany, Austria, France, the Netherlands, Italy, Spain, Hungary and Luxembourg. Those are not minor countries.

Mr. Forth: Luxembourg is.

Mr. Leigh: They are our partners. My right hon. Friend may not approve of the word, but for better or for worse, they are our European Union partners. I fear that the next step may be to try to move towards harmonisation where every business is required to join a chamber of commerce and the chamber of commerce movement is set in stone. It would become increasingly difficult, or impossible, for people to set up rival chambers of commerce.
There are countries where chamber membership is voluntary. That is the pattern in many dynamic economies. While south-east Asia has some problems at present—

Mr. Deputy Speaker (Mr. Michael Lord): Order. The hon. Gentleman is gently straying into a Second Reading speech. He should return to the amendment.

Mr. Leigh: I am grateful, Mr. Deputy Speaker. I was briefly setting out the background to my concerns.

Mr. Maclean: Without straying off the point, does my hon. Friend think that it would be sensible for another place to amend the Bill to make Commissioner Prodi one of the relevant people to consult? He could give his opinion on whether the chambers of commerce were dodgy or corruption was involved. That would deal with my hon. Friend's European point.

Mr. Deputy Speaker: Order. I would be grateful if the hon. Gentleman would remember my earlier stricture.

Mr. Leigh: I will not follow my right hon. Friend down that path.
When my right hon. Friend the Member for Bromley and Chislehurst replies, he should accept that the Secretary of State made a fair point about the burdens that would be imposed on his officials if he were to consult all the bodies to which my right hon. Friend referred. I am not sure that that is what amendment No. 1 seeks to achieve. Were the amendment passed, subsection (2)(a) would provide for the Secretary of State to
consult with such persons and individuals who appear to him to have an interest".
I would have thought that he and his officials could deal with that sensibly if the amendment were accepted; I suspect that it will not be. My right hon. Friend is not suggesting that in every case the Secretary of State should have to consult all the individuals and organisations that may have an interest but that he should consult organisations that appear to have an interest. My hon. Friend the Member for South Cambridgeshire adduced an example about chambers of commerce being formed in the east of London. No one is suggesting that the amendment would force the Secretary of State to consult all organisations, businesses, trade unions and local

government organisations in the east of London but simply those that appear to have a proper interest. Some may think that that is playing with words, but it is not. It goes to the fundamental point of the Bill. It is important that my right hon. Friend the Member for Bromley and Chislehurst receives assurance on that.
We all wish the Bill well but once it is passed, there must be no question of creating a cosy, narrow network with new entrants discouraged from entering. If the debate has achieved anything, it has prised out from the Secretary of State an admission that that could be a danger. He made an interesting point that needs to be emphasised. He is prepared to return to the House and, if necessary, through an order amend the Bill to make it clear that he is determined to consult widely. I congratulate my right hon. Friend the Member for Bromley and Chislehurst on his amendment.

Mr. Forth: I am most grateful to all the right hon. and hon. Members who have spoken in this short debate. It has been helpful in clearing my mind about the Bill's purpose and effect. I am grateful to my hon. Friend the Member for Gainsborough (Mr. Leigh) for his support. I never feel all that lonely in these cases because I am spurred on by the thought that there have been many lonely crusaders for justice and truth. He shares my lifelong suspicion of cosy consensus. I know that it is trendy these days to be consensual but I have never felt comfortable with that. When everyone says that they agree, I am suspicious because it is usually wrong. We all agreed with the Child Support Agency, and where did that get us? The same was true of the Dangerous Dogs Act 1989, which is hardly one of the great successes of recent legislative history.
The object of our proceedings is to give proper consideration to legislation, which is what we have been doing. It has been useful. I am grateful to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) for the knowledgeable way, which we have come to expect of him, in which he answered the points made. I am particularly grateful to the Secretary of State, who, typically, listened to the debate and was careful and courteous in answering fully our points. I do not know whether Pepper v. Hart is still part of our lives.

Mr. Maclean: It is.

Mr. Forth: My right hon. Friend, who is a lawyer, and Opposition legal experts confirm that it is. We can therefore be doubly reassured because what the Secretary of State said will be recorded faithfully, as ever, in Hansard. That allays most of the fears expressed by me and my hon. Friend the Member for Gainsborough. Pepper v. Hart means that the Secretary of State's words, along with those of the Bill's promoter, will become part of the reassurance. When the Bill, as it undoubtedly will, becomes statute, we can be reassured of their intentions in respect of its implementation. I am, therefore, reassured to that extent.
I was impressed by the point that was made by the hon. Member for Upminster (Mr. Darvill) and echoed by other hon. Members. It touches a raw nerve end for me, which was probably why the hon. Gentleman made it; he referred to the burdens and bureaucracy that might arise from the amendments. I am sensitive to that point and, indeed, rather persuaded by it. Although I believe that


that process would not be undertaken frequently, my hon. Friend the Member for South Cambridgeshire pointed out that there might be spurts or splurges of activity that could create difficulty for firms, companies and so on—even for the Department of Trade and Industry itself. I am sensitive to that point and want to take it into account.
I hope that the debate has been valuable. I have certainly emerged from it better informed, and reassured. Given the reassurances that we have received from the Secretary of State and from my hon. Friend the Member for South Cambridgeshire, I hope that my hon. Friend the Member for Gainsborough joins me in agreeing to withdraw the amendments. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Forth: I beg to move amendment No. 3, in page 1, line 23, leave out 'may' and insert 'shall'.

Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 6, in clause 3, page 2, line 8, leave out 'may' and insert 'shall'.

Mr. Forth: Clause 2(2) is another important part of the Bill; it deals with the publication of guidance by the Secretary of State
with respect to factors which may be taken into account in determining whether to approve the registration of a name to which this section applies.
That follows on properly and logically from the debate that we have just held. It revolves around territory that is familiar—but important—to all Members of the House: our friends "may" and "shall". As drafted, the Bill states only that:
The Secretary of State may publish guidance
with respect to those factors. I want to persuade the House that that should be "shall".

Mr. Lansley: I understood that, in the amendments that have been selected for debate, my right hon. Friend does not want a requirement that the Secretary of State should publish guidance, but that there should be a requirement that the Secretary of State should take that guidance into account when determining whether to approve the registration of a name, under both the companies and business names legislation.

Mr. Forth: Indeed—we are talking about the relevance of the guidance and the role that the guidance will play. That follows on from what was said earlier. In order to give the matter some context and substance, I want to pick up from the excellent guidance notes that have been provided for us by the British Chambers of Commerce. Those notes give a flavour of the factors that members of that organisation suggest are relevant to these considerations, and they will enable the House to judge whether such matters should be discretionary or mandatory—if I may use that shorthand.
I have highlighted some of the comments in that helpful Bill briefing document and will cite them briefly, as they set the matter in context. The document refers to the consideration of
a proposal to adopt a new geographic descriptor"—

that has already been referred to during the debate; and to
an application from promoters to set up a new Chamber".
That point is crucial to the case that my hon. Friend the Member for Gainsborough (Mr. Leigh) and I wanted to make; we see that as a most desirable process. In that case, according to the document
BCC will examine the draft Memorandum and Articles of Association and check whether they are appropriate to a Chamber of Commerce.
The document notes a number of questions that arise from that—questions that 1 envisage should be very much part of the guidance. Such questions are:
Do the members control the Chamber? Are there proper processes for members to elect the Board?
Such questions naturally arise. The document continues:
Are the rules on membership appropriate so that membership is not unreasonably restricted?
One can begin to see the sort of questions that should properly be part of the guidance.
The document continues:
Next, inquiries are made about the proposed directors. Do they have private, possibly commercial motives? Do they have any experience of Chambers?
We all know now that the hon. Member for Putney (Mr. Colman), who has left the Chamber, would qualify on all those grounds and probably on several others. We know that that is the sort of territory that we should be in.
The document points out that
A Chamber is a membership body, so what evidence is there of wide support from the business community?
Again, that ties up to the points that we debated earlier. The document continues:
Are we being asked to sanction a Chamber which is always going to struggle to represent the business community?
I imagine that such points would properly be reflected in the guidance that we are debating.
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The document notes, interestingly, that
Particular care is taken with applications from people wishing to set bilateral Chambers i.e. a Chamber purporting to relate to issues of bilateral trade between the UK and another country.
That relates to a point made by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley).
What we see in the document is surely the view of the members of the BCC on the kind of factors that the Bill originally stated
may be taken into account in determining whether to approve the registration of a name"—
and that what my amendment proposes must be taken into account.
I suspect that people outside the House often find it difficult to understand our preoccupation with "may" and "shall" when we consider legislation. However, it is a most important matter. At present, the Bill states only that "it may be", but I am proposing that "it shall be". I hope that my brief rehearsal of some of the points made in the BCC guidance will give some idea of the vital necessity for us to have a guarantee that those factors will be taken into account whenever the deliberations, which the Bill insists that the Secretary of State will carry out, are undertaken. We need that level of reassurance.


In the end, we may again have to rely on reassurances given by the Secretary of State and perhaps by my hon. Friend the Member for South Cambridgeshire in this Chamber—so be it. However, at the very least, the tabling of such amendments as these and the holding of such brief debates enable those reassurances to be given. Obviously, I should prefer it if the Bill were amended in the way that my amendments suggest. However, what emerges during these sort of proceedings is that such reassurances—if, indeed, they are given—can be almost as effective in their own way, by providing guidance as to what will happen in future. They give an indication of the thinking of the promoter of the Bill and of the Secretary of State—the holder of that position will be responsible for carrying out the provisions of the Bill, as the Bill points out.
We want some clear indications—or even commitments—as to the way in which the provisions will be implemented. At present, the Bill states only that the guidance
may be taken into account".
That leaves a degree of unacceptable uncertainty; we need to know much more. If we are to have guidance, why should it not be taken into account? Are there circumstances in which the kind of factors that I have briefly outlined as to membership, directors and so on—especially in respect of bilateral chambers—would not be taken into account? That is difficult to imagine. It may be that I am wrong and that some hidden flexibility was built into the Bill that required it to be drafted in the way that it was, but I need a great deal of reassurance on this matter.
I look to the Secretary of the State and to the promoter of the Bill for a clear idea of how they see the role of the guidance—for example, what it would contain, if my comments about that are off beam, and especially, the circumstances in which the guidance might be discretionary rather than mandatory. I want that to be fixed firmly; I want to ensure that the guidance plays a central and key role, and that we can rely on it to give direction to what is done—rather than for it to be discretionary. That is the purpose of my amendment.

Mr. Darvill: I always listen with care to the right hon. Member for Bromley and Chislehurst (Mr. Forth). He holds principled views, for which he argues very strongly. In the Committee on the Greater London Authority Bill, on which we both had the pleasure to serve, I twice spoke up in agreement with points that he had raised. However, this time I believe that he is mistaken.
In my view, there should not be a burden on the Secretary of State to issue guidance. It seems to me that the current law for the setting up of companies, as it will be amended by the Bill, will be flexible enough to cope with the requirements that are envisaged in any such application. At some stage, if there were particular difficulties surrounding such applications, it might be necessary for the Secretary of State to issue guidance. If contentious applications were made, which were being contested in the courts—perhaps even by judicial review—such guidance might help.
However, I understand that the Bill was designed to give flexibility to organisations, companies, chambers and so on, and if the Secretary of State was forced to make the guidance notes—as he or she would be if amendment

No. 3 were accepted—that flexibility would be limited. I believe that that would be too prescriptive, so I urge the right hon. Member for Bromley and Chislehurst to reconsider and withdraw the amendment.

Mr. Lansley: I am grateful to my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) for moving amendment No. 3 and giving us an opportunity to consider another important aspect of the Bill. I am also grateful to the hon. Member for Upminster (Mr. Darvill). Perhaps I should explain why I do not agree with my right hon. Friend or the hon. Gentleman, and why I hope that my right hon. Friend will withdraw amendment No. 3 and will not press amendment No. 6 to a vote.
The effect of amendments Nos. 3 and 6 would be that the Secretary of State, having issued guidance, would have no discretion whether to take into account the factors set out in the guidance when deciding whether a title should be used. The amendments do not directly bear upon whether the Secretary of State issues guidance. The Secretary of State would continue to have discretion whether to issue guidance. However, I emphasise that it is my opinion, as the Bill's promoter, that it is a key aspect of the Bill that there should be guidance, and that if the Secretary of State were unreasonably not to issue guidance, that should be challenged.
Under existing companies legislation, the Secretary of State, when considering an application to use the title "chamber of commerce", can reasonably say no only when the application is by a person or body that is plainly not a chamber of commerce, but not when the proposed title, or the circumstances of the organisation proposing it, does not meet the positive test of complying with the characteristics of a chamber of commerce. Therefore we are moving—it may be regarded as a subtle distinction, but it is an important one—from a test that has proved to be very difficult for the Secretary of State to use to a more purposive test.
The question of what is in the guidance brings us back to the question of what happens once guidance has been issued. I do hope that the Secretary of State issues such guidance, and in the way that the Bill posits, having discussed and negotiated with the British Chambers of Commerce and other interested parties.
As my hon. Friend the Member for Gainsborough (Mr. Leigh) said, there is a tendency to set things down in the Bill. When I first drafted the Bill, I tended to want to put everything in it. The legislation, as introduced in the previous Session, in the form of the Chamber of Commerce (Protection of Title) Bill, included a schedule, the purpose of which was to set out the essential characteristics of a chamber of commerce. During discussions on the legislation in the previous Session, I was persuaded that that would be inflexible, that some flexibility was necessary and that everything should not be set down in the Bill. The Secretary of State will therefore have that discretion.

Mr. Heald: Is my hon. Friend saying that, if the amendment were passed, the words
factors which shall be taken into account
would be very restrictive, because no other factor could be taken into account except those factors, and that that would restrict the discretion of the Secretary of State unreasonably?

Mr. Lansley: I am very grateful to my hon. Friend, who, having a legal background, has come to the point


which is often the crux of the not pedantic issue of whether one says "may" or "shall". That is indeed an objection to the amendment. However, in the spirit in which my right hon. Friend the Member for Bromley and Chislehurst has moved the amendment, I hope that the House will bear with me while I explain what I hope that the guidance will cover, and why it would not necessarily in all circumstances be appropriate for each aspect of that guidance to be taken into account when considering every application—although my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) is absolutely right to say that we do not want the Secretary of State to be constrained not to take other factors into account if they are not expressly provided for in his guidance.
My right hon. Friend the Member for Bromley and Chislehurst has mentioned some of the things that the British Chambers of Commerce has said in its briefing to Members of Parliament, but it may help if I list some of the things that I foresee as being among the characteristics of a chamber of commerce. I shall divide them into three categories.
The first category relates to the constitution of a chamber of commerce. Although some chambers of commerce enjoy a royal charter, they are the lesser number. A chamber of commerce should be constituted as a body corporate, but not a company limited by shares. In almost all circumstances, chambers of commerce are incorporated as companies limited by guarantee. The straightforward purpose of that is to ensure that they cannot be used as a profit-distributing vehicle—that any moneys generated by the commercial activities of a chamber of commerce should continue to be re-invested for the improvement of service to the whole membership.
Secondly, a chamber should not be a subsidiary or division of any other body except another chamber. The independence of chambers of commerce is an important characteristic and should be reinforced, in my view, by the stipulation that a chamber of commerce should be independent and not under the direct control of Government or a local authority. It would be contrary to what I would regard as the essential characteristics of a chamber of commerce if, for example, local authority X were to set up chamber of commerce X. That body would not be representative of the business community and independent of Government.
Finally, the constitutional arrangements of a chamber of commerce should provide for it to be controlled by the whole of its membership—not by a faction or a cabal, still less by an individual. There should be an expectation that a very high proportion of the members of a chamber of commerce should be engaged in manufacture, commerce, business, trade, shipping, distribution, agriculture, fishing or professional practice. The hon. Member for Upminster reminds us that those who are in the professions often play a significant part. Although, as my hon. Friend the Member for Gainsborough said, chambers of commerce were often established as manufacturing, commerce and trade oriented bodies, they now represent the whole business community, including the professions.
However, there is a British chamber of shipping. Therefore it is possible to contemplate circumstances where bodies that enjoy a title related to "chamber of commerce" do not necessarily comply with that criterion, because they are not representative of a geographical area,

but represent a particular trade relationship—perhaps between the United Kingdom and another country—or a particular form of trade or business. That has a bearing on the question whether that factor should be taken into account in all cases.
11.30 am
The guidance should cover the issue of whether a chamber of commerce whose name is a geographical descriptor is genuinely representative of all businesses in that area. That point was alluded to in previous discussions, but I think it should be made explicit now. When a name refers to an area, the Secretary of State must also consider whether the chamber of commerce seeks to promote business and trade between that area and others. That is an important point, and we must draw a distinction between chambers of commerce that represent a specific geographical area and those that seek to promote trade between areas. The guidance should take account of certain factors when assessing a title application by a chamber of commerce that represents a specific geographical area and different factors when considering an application by a chamber of commerce that seeks to represent trade between areas. Not every factor should be taken into account in every application.
I think that it is important that the essential characteristics of chambers of commerce should include some central purposes. First, a chamber of commerce should exist to serve and promote the interests of the whole business community in any place or area to which its name is applied. The body should foster the interests not simply of its members but of the whole business community in the area that it represents. Secondly, a chamber of commerce should provide a service to the local business community—it would not necessarily be exclusive to its members—in respect of information, advice and assistance. Thirdly, a chamber should undertake, or encourage its members to undertake, joint activities and arrangements for mutual support and promotion of the interests of the business community. That is one of the central original purposes of chambers of commerce: they must promote the relationship between the local business community and its legislatures—

Mr. Deputy Speaker: Order. This is a fairly general point. Will the hon. Member for South Cambridgeshire (Mr. Lansley) relate his comments to "may" and "shall"?

Mr. Lansley: Yes, Mr. Deputy Speaker. This is my final point about guidance.
It is clear that it will not always be relevant to take into account whether a chamber of commerce has the purpose of representing a business community to a legislature or to other bodies. For example, if the body seeks to promote trade between two areas, it might have no representational role in relation to local authorities or central Government. It might operate in the international sphere, even though it is incorporated in this country. Some chambers of commerce and related titles are incorporated in this country but are not representative of a particular national geographical area. Therefore, it would not be relevant to assess them according to whether their activities include joint promotion or representation to Government in their area.
I hope that I have covered reasonably fully what I think the guidance should include. In the process, I hope that I have illustrated that, because of the scope of the guidance


and the diverse bodies that use the title "chamber of commerce", we should not assume that every one of the factors set out in the guidance will apply to each of the bodies that seeks to use the "chamber of commerce" title. Therefore, the legislation should give the Secretary of State discretion to decide not only the issuing and timing of guidance, but which factors to apply to a particular application in each instance.
I apologise if I have trespassed upon the patience of the House. I hope that I have assisted hon. Members in understanding why this small but important point is phrased in the way it appears in the Bill. I hope that my right hon. Friend will feel able to withdraw his amendment.

Mr. Leigh: I support amendment No. 2, but, for the reasons given by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), I oppose amendment No. 3. I am not sure why, in framing the Bill, we are talking about the Secretary of State "perhaps" publishing guidance. Of course he will publish guidance, so I am not sure what is wrong with amendment No. 2 proposed by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), which says that the Secretary of State "shall" publish guidance.

Mr. Deputy Speaker: Order. We are not discussing amendment No. 2.

Mr. Leigh: I apologise, Mr. Deputy Speaker. I may have got the numbers wrong, but I hope that my point will stand as to whether we should talk in terms of "may" or "shall". My right hon. Friend said that the Secretary of State shall publish guidance, which is a very important point.
My hon. Friend the Member for South Cambridgeshire listed the factors that will influence the Secretary of State in determining whether he should allow the creation of a new body. My hon. Friend referred to some very unremarkable facts. Of course the Secretary of State would not want to allow the establishment of a new body if it were not constituted as a body corporate or run constitutionally and democratically. Those points are well made. However, the "may" or "shall" point is important in how it relates to the geographical descriptor. I think that is the key to the whole argument, and it relates to the fears that we expressed when considering the previous group of amendments.
I am worried that, when the Secretary of State considers these matters, he will have regard to not only whether the proposed body is run by reputable people, is run democratically and seeks to represent people in the area but whether a similar body already exists in that area. How much weight will he give to that latter point? That is an important point that relates to my experience in the last Parliament. As a lawyer, I was retained by the newspaper distribution industry. It is a very restrictive business, being a vertical monopoly. Until recently, one was not allowed to open a news agency when one already existed in that area. You can see my point, Mr. Deputy Speaker. I want to try to frame the legislation—I hope that the Secretary of State will reassure me about this in his winding-up speech—so that no one will be denied the ability to create a new chamber of commerce simply because one already exists in that area.
There may be perfectly valid reasons—although it may not happen very often—why the existing chamber of commerce is not doing its job adequately. It may have been taken over by a clique or, as often occurs with democratic bodies, it may have remained in the same hands for many years and atrophied. I want to ensure that the Secretary of State is able to look at the issue in the round. The guidance should be quite clear. Someone may wish to establish a chamber of commerce that is perfectly well constituted and genuinely representative but which covers an area served by a similar body. For the sake of argument, let us suppose that someone wishes to establish the new Blankshire chamber of commerce, but there is already a Blankshire chamber of commerce in that area. I do not understand how the procedures will work. Will the Secretary of State say, "I'm sorry, but there is already the Blankshire chamber of commerce, so your geographical descriptor is not accurate."? I am sure that that is not what my hon. Friend intends to do. Indeed, I am sure that he wants an open and democratic system that permits new entrants. We are talking about something that may happen only rarely but there may be good reasons why it might be necessary in some instances. I hope that when the Secretary of State replies, he will be able to give us the reassurance that we seek.

Mr. Byers: I shall try to reassure right hon. and hon. Members, either in relation to the two amendments, which are narrowly drawn, or on Third Reading, when some wider issues may need to be addressed.
Amendments Nos. 3 and 6 relate specifically to the factors that may be taken into account. The right hon. Member for Bromley and Chislehurst (Mr. Forth) is trying to remove "may" and replace it with "shall". Many Members will have debated for hours, if not days, the merits or otherwise of "may" as opposed to "shall". Indeed, I remember—it was probably four or five years ago-when the right hon. Member for Bromley and Chislehurst was a Minister in the Department of Education and taking a Bill through Committee. I was then a Labour Back-Bench Member. We debated "may" and "shall" for many hours in the context of the various powers that the Secretary of State should have.
Right hon. and hon. Members will know that there are significant reasons why "may" is to be preferred. If "shall" is inserted in a Bill, it is often seen to be prescriptive. There may be other issues that should be taken into account, or it would be appropriate to take into account, in particular circumstances. If "shall" is used, there is a limit on the issues that may be reflected upon by the Secretary of State. By having "may", the Secretary of State has the discretion to consider other factors if it is appropriate to do so in the particular circumstances of an individual case.
There have been references to the publication of guidance. You were right to point out, Mr. Deputy Speaker, that the two amendments do not touch on that issue. The amendments do not relate to whether the Bill should state "may publish" or "shall publish". The amendments that do relate to that issue have not been selected for debate. That being so, we must restrict ourselves to the factors that may or, if the amendments are carried, shall be taken into account.
The right hon. Member for Bromley and Chislehurst used shorthand when he said, "Is it discretionary or mandatory?" That is probably quite an accurate way of


putting the question. There will be difficulties if the amendments are carried. It would be restrictive and prescriptive for the Secretary of State. The issues to be taken into account would be set in stone and would be required to be taken into account. More worryingly, the Secretary of State would not be able to take into account some wider issues that it might be appropriate to consider in individual cases but not in all cases.
For these reasons, I ask the right hon. Member for Bromley and Chislehurst to withdraw the amendments. He has raised an interesting debate about "may" and "shall" and I am sure that it is one to which we shall return on other occasions, perhaps in different capacities, in the months and years ahead. However, I hope that he will accept today that inserting "shall" would create some real difficulties. I hope also that he might feel able to withdraw the amendments.

Mr. Forth: I am grateful again to the Secretary of State for so carefully replying to the debate. I accept both the spirit and substance of what he has said. I am sufficiently reassured, and sufficiently anxious to move on to Third Reading, to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Order for Third Reading read.

Mr. Lansley: I beg to move, That the Bill be now read the Third time.
I am grateful for the opportunity to move to Third Reading. I am grateful to right hon. and hon. Members on both sides of the House who on Second Reading gave the House a short but useful opportunity to understand the purposes of the Bill. Consideration of the Bill in Committee was an interesting occasion when we were able to raise a number of issues, none of which was controversial. It is always interesting when a Bill is being considered in Committee and there are no amendments. Sometimes, as my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) said in a previous debate, that is not encouraging. In this instance, I hope that my right hon. Friend and other hon. Members will be comforted by the thought that there were no amendments in Committee because the Bill follows a pattern that was agreed after substantial amendment to another measure in the previous Session.

Mr. Forth: That may be so, but an alternative explanation is that members of Committees are so carefully picked that sometimes they neither wish to engage in nor are capable of objective consideration or criticism of a Bill, with the result that it sails through Committee without proper scrutiny.

Mr. Lansley: I am grateful to my right hon. Friend. I would not subscribe to that view in this instance. When my right hon. Friend examines the Bill at a later stage, I hope that he will find that, although he has properly raised various issues, it is competent for its purpose and in that sense is a quality product. It is our objective to achieve that.
I thank Ministers at the Department of Trade and Industry, as well as the Financial Secretary, who was a DTI Minister in the previous Session. The hon. Lady was

supportive of the Bill at that time. The Secretary of State and the Minister for Small Firms, Trade and Industry have been helpful during this Session, as have Liberal Democrat Members and my right hon. and hon. Friends. I hope that we have arrived at a Bill that will substantially improve the environment for chambers of commerce. It is certainly legislation that they seek, and for good reasons.
It is important to stress that the Bill is not sought on the basis that existing legislation has been applied in anything other than a good fashion. I think that it has been applied as well as could possibly have been expected. However, there are deficiencies in its present structure. That is why we introduce legislation. If existing legislation is good enough but has been misapplied, that is a different matter and does not justify the introduction of new legislation. However, in this instance there are deficiencies in current legislation. It is the purpose of the Bill to correct potential problems and abuses.
For example, the role of British Chambers of Commerce as a consultee on applications has not been entrenched in statute. It should be so entrenched for a series of reasons to which I referred in the first of our two debates on Report. Secondly—this touches on the issue that we dealt with in the second of our debates on Report—there is no benchmark in legislation against which the Secretary of State can judge what is a chamber of commerce. The hon. Member for Upminster (Mr. Darvill) talked about whether the Secretary of State should issue guidance. I think that he should. In the absence of it, the Secretary of State is trying, with difficulty, to answer the question, "Is this plainly not a chamber of commerce?" It is important that there should be a benchmark, and it is important also that legislation should provide the power to issue guidance. Under existing legislation, the Secretary of State could not issue such guidance nor use it as he will be able to use it once the Bill is enacted.
With your indulgence, Mr. Deputy Speaker, I was able to explain the factors that I believe should be included in guidance. There is no need for me to rehearse those factors on Third Reading. I hope that, when the time comes, the Secretary of State and British Chambers of Commerce will be able to agree something along the lines of those factors to form the basis for guidance.
As has been said in previous debates, there is a risk of abuse. Fortunately, it is not a risk that has materialised to any great extent in this country—although it has happened in other countries, as my hon. Friend the Member for Gainsborough (Mr. Leigh) said. There is a problem about the scope to challenge the geographical descriptors that are applied to chambers of commerce. There is a difficulty every time such an issue arises. My hon. Friend raised the hypothetical example of a chamber of commerce that seeks, as it were, to be the new Blankshire chamber of commerce. The Secretary of State may well not be able to entertain such an application. It will have to be justified in relation to the factors to which I referred.
I envisage circumstances in which a title is allowed although it includes the geographical descriptor of an area that is covered by another chamber of commerce. However, the question should be whether the chamber of commerce seeking to use that title meets the essential characteristics of a chamber of commerce as stated in guidance. If it does, all will be well and good.

Mr. Leigh: My hon. Friend is giving us very important reassurance. Is he saying that the Secretary of State will


consider new applications solely on their merits and on how the bodies will operate, and that applications should not be refused solely on the ground that a proposed organisation will cover the same area as an existing one?

Mr. Lansley: That is indeed my view—each application should be considered on its merits. The purpose of providing guidance is to enable us much more clearly to understand how the merits are judged.
It is possible to envisage circumstances in which two chambers of commerce are, by reference to their geographic descriptors, working in the same area. Clearly, it would be undesirable for them to have titles that are so similar that people trying to do business with them might be confused about which body is which.
Neither the chambers of commerce movement nor I, in promoting the Bill, are trying to create an approved and exclusive network of chambers of commerce in which only those organisations approved by British Chambers of Commerce can represent a specific geographical area.
Hon. Members have dealt with political boundaries—with which area is within the compass of which local authority or parliamentary constituency. I know that none of us would advise British chambers of commerce to try to agree exclusive boundaries for their responsibilities and areas, which will overlap. Although more than one chamber may cover the same area, that will not be a problem in itself.
The London Members present will appreciate that there is no difficulty with the existence of both a London chamber of commerce and industry and, for example—as the hon. Member for Putney (Mr. Colman) said—a Merton chamber of commerce. They seek to serve different purposes for their area, to provide different but complementary services, and to do so to a high standard; and that is perfectly acceptable. We are not trying to establish a geographically exclusive operation.
We are trying, I hope, to ensure that a geographical descriptor is not applied to a chamber of commerce that is not justified by its ability to represent the business community in that area. That is a central point of the Bill's structure.
On Second Reading, my right hon. Friend the Member for Bromley and Chislehurst addressed the vexed issue of reversibility—the extent to which it is possible for the Secretary of State to conclude that a name should be removed from a chamber of commerce. For the benefit of the House, I should explain how I foresee that situation being dealt with. In some circumstances, a specific chamber of commerce may no longer be operating as a chamber of commerce. In other circumstances, an organisation, although it holds the title of chamber of commerce, may not be operating as a chamber of commerce at all, but in a manner that is potentially misleading and harmful to those in business.
British Chambers of Commerce, for example, owns five chamber of commerce titles. It has acquired those titles to frustrate possible efforts by others to acquire them to abuse the business community wishing to deal with a chamber of commerce. One could say that those registered titles are redundant, as they are not being used for chamber of commerce purposes. However, in those circumstances, I do not think it would be right for the Secretary of State to remove the titles, as they have been registered for a perfectly legitimate purpose.
The test that should be applied—as it is in section 32 of the Companies Act 1985—is whether the Secretary of State believes that the name in which a company is registered gives
so misleading an indication of the nature of its activities as to be likely to cause harm to the public".
In those circumstances, he may direct it to change its name.
We are dealing with a difficult matter. We are not trying to create a situation in which the Secretary of State is daily to police the activities of chambers of commerce—as that would be wholly contrary to the purpose of the chambers of commerce movement, which is to be business led, membership controlled and very decentralised in operation. I therefore do not want the Secretary of State to tell chambers of commerce, "You don't match up to my standard of a chamber of commerce, so I shall remove your title." The chamber of commerce movement itself would deprecate that.
Current legislation provides that, if the tough test that I have described—of whether harm would result from a body registering and continuing to use the title "chamber of commerce"—is met, the Secretary of State shall have the power to ask for the title to be changed. I think that that is a satisfactory basis on which to proceed.

Mr. Forth: My hon. Friend has rightly pointed out that the issue has been on my mind for some time, and I am grateful to him for the point that he has just made. However, surely he is not saying that this Bill is justified by the fact that we can already deal with the matter under current law, principally the Companies Acts.

Mr. Lansley: The issue is whether the Bill—which contains provisions additional to current legislation—should include provisions giving the Secretary of State a power to cause a chamber of commerce title to be changed, over and above the generic power already provided in companies legislation and based on the test of harm. I believe that it would be wrong to provide the Secretary of State with a more intrusive power in dealing with bodies calling themselves chamber of commerce, or related titles, than he already has in dealing with any company that has been given a title and continues to use it.
There is already a generic power; the question is whether there should be a specific one, on chambers of commerce. I should be happy to rest on the Secretary of State's generic power provided by companies legislation, and see no need to go beyond it.
I apologise for that digression, but, as the Bill's promoter, I am conscious of the fact that we should not complete our proceedings without specifically addressing the issues raised in earlier debates.
I thank all those who have further contributed to our debates on Report and Third Reading, and especially officials at the Department of Trade and Industry, who have been enormously helpful to me in reconciling and trying to mesh the objectives that I sought to achieve in the Bill—to support the chamber of commerce movement—with the structure of current companies legislation. As hon. Members will appreciate by my responses on some of the issues, the Bill's structure is very much designed to work within the structure of companies legislation, rather than to operate outside it or perhaps come into conflict with it.


I hope that the Bill will reinforce the efforts of the chamber of commerce movement to create a more complete and comprehensive structure that provides better services to the business community and can take more responsibility for their provision—even to the point at which the Government can stop doing things and the business community can more readily do them for itself. Rather than reinforcing the defence of the status quo in the chambers of commerce movement, I hope that the process will promote and enhance the standards and quality of service to the business community. On that basis, I hope that the House gives the Bill a Third Reading.

Mr. David Heath: It is a pleasure to be able to contribute to the progress of the Bill, even at this late stage. I commend the hon. Member for South Cambridgeshire (Mr. Lansley) on the content of the Bill and the admirably well-informed way in which he has taken it through its stages in the House. I am also pleased to see that the Secretary of State for Trade and Industry has been present throughout this morning's proceedings.
I do not want to delay this worthwhile Bill. It was worthwhile in its earlier manifestation, when the hon. Member for Windsor (Mr. Trend) introduced it. The proceedings before today have been characterised by their brevity. The Official Report shows that 34 minutes were spent on Second Reading and 27 minutes in Committee, which, by anyone's standards, is fast progress for a Bill. We have rightly been slightly more leisurely today, because it is important to tease out the purposes of a Bill and its consequences on enactment.
I am interested in the debate not least because my local chamber of commerce was keen on the Bill and gave its support. However, there is one blemish in the record of the hon. Member for South Cambridgeshire—one blot on his escutcheon—to which I must draw attention because it illustrates a point that we should consider before giving final approval to the Bill.
Given my interest in the Bill, imagine my surprise on Monday 1 March—St. David's day—when I saw, at column 704 of the report of the Second Reading, a remark that was interpreted in my area as a slighting reference, intentional or not, to the Wessex chamber of commerce. This is an important point about geographical descriptors and the operation of the legislation. The hon. Member for South Cambridgeshire has also referred to the issue in radio interviews, so it is clearly important to him.
The Wessex chamber of commerce serves Frome in my constituency, and several other towns. It may be helpful to describe the genesis of the Wessex chamber, because it illustrates a difficulty that I should like the hon. Gentleman, or perhaps the Secretary of State, to address. The Frome chamber of commerce used to deal exclusively with the affairs of the town. It did so extremely well and celebrated its 50th anniversary recently, when my namesake the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) was the guest of honour. I hope that it will work closely with the newly elected Liberal Democrat town council in Frome over the next four years.
However, the chamber realised that there is a limit to the scope of the services that can be provided to the trade members in a small market town and that there is an

advantage in associating with other areas. It considered the best way forward. It thought about joining the prestigious and active Bristol chamber of commerce, but felt that that was probably not right for a town some distance from Bristol. Instead, it looked towards the West Wiltshire association, where it saw towns of a similar size with similar activities with which it fitted well. Eventually, a joint chamber of commerce was formed serving Bradford-on-Avon, Melksham, Trowbridge, Warminster, Westbury, Frome, Chippenham, Devizes and Shepton Mallet. That immediately created a problem of nomenclature. The chamber of commerce could not be called West Wiltshire any more because it extended outside west Wiltshire. It is difficult to find a geographical descriptor that covers four district council areas, two county council areas, four health authority areas—if that is relevant—and five parliamentary constituencies. How can that area be described adequately?
I experienced a similar problem when I was chairman of Avon and Somerset police authority. When the Government decided to abolish Avon county council, we had a problem knowing what to call the police authority. As chairman of the authority, I said that we should do nothing, partly because I was not prepared to spend money on new cap badges, but also because it was difficult to find a geographical descriptor for the area. The "Somerset, Bristol and Parts of South Gloucestershire constabulary" would have been a bit of a mouthful and would not have been likely to commend itself to the Home Office or the local population, so we stuck with Avon and Somerset.
The same applies to Wessex. The hon. Gentleman has introduced a provision which might have the capacity to mislead, as Wessex is a rather amorphous geographical term. I do not want to get into a discussion about the heptarchy and the realm of the west Saxons, but Wessex is often used to describe an area which we know is in the west country but of whose extent we are not sure. Wessex is also one ward in the West Somerset district council area, so the term does have a specific use. However, in this case it was decided on as a convenient term.
Would the Bill create difficulties if a chamber of commerce were set up but it was difficult to find a precise geographical definition of the area that it covered? Would it have any effect on existing chambers of commerce that had been set up in similar circumstances? No one would suggest that Wessex chamber of commerce is doing anything other than an excellent job for the businesses that it represents. There is certainly no intention to deceive or any sense of self-aggrandisement.

Mr. Lansley: I am most grateful to the hon. Gentleman for providing me with an opportunity to set the record straight. If my references to the application by the former West Wiltshire chamber of commerce to call itself the Wessex chamber of commerce were regarded as a criticism, I happily withdraw what I said. I am quite clear from all the evidence received that the Wessex chamber of commerce is one of standing and has every reason to use that title. I know from past experience not to question the definition of Wessex. However, it illustrates the point that we have to apply ourselves carefully to the issue. I understand that British Chambers of Commerce was consulted and raised no objection because the Swindon chamber of commerce had no objection. However, the Dorset chamber of commerce would have had an


objection—probably not one that would have prevailed—and the process did not mesh together properly. We have to be sure that the description is accurate.

Mr. Heath: I am most grateful to the hon. Gentleman for an extremely helpful intervention which I will transmit to members of the Wessex chamber of commerce. I know that they will be pleased to hear what he said, which was helpful in explaining how the Bill will operate.
There is still a problem in respect of making sure that nobody has a veto on what may be a convenient term simply because it could be considered misleading. There should be a proper test as to whether there might be a genuine chance of a term misleading the general public and anyone who wished to trade with that chamber of commerce. The test of harm in the Companies Act 1985, to which the hon. Gentleman referred, should underlie the consideration of the Secretary of State in determining whether a particular geographical description is likely to mislead.
Having made that point, which I hope is a useful one, and having been reassured to a considerable extent by the hon. Member for South Cambridgeshire, I hope that I shall be reassured further by the Secretary of State and that the Bill will receive a Third Reading and pass into law. It is a worthwhile measure.

Mr. Heald: I pay tribute to the way in which my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) has presented the Bill, building up a cross-party consensus in the House. I know how hard that can be from my experience of a private Member's Bill on insurance company reserves when I had a great deal of difficulty with the hon. Member for Bolsover (Mr. Skinner). In the end we prevailed, but it is not always easy. Anyone who reaches this stage with a private Member's Bill deserves huge plaudits. I also thank the Secretary of State for his constructive approach to the Bill. All hon. Members appreciate it if the boss, the man at the top of the Department, can be in the House when such a Bill is being debated.
The Bill will not affect the status title of any existing chamber of commerce, but it will deal with a problem that has become increasingly evident. Although the existing procedure has been well administered, there has been concern that added protection is needed, so that the title "chamber of commerce" and related titles can be applied to persons and bodies that are genuinely representative of the business community and the area described in the title.
It will be helpful if the Secretary of State can publish guidance on the criteria to be used in determining whether a body should be permitted to use the title. My hon. Friend the Member for South Cambridgeshire was right to say that there has not been a benchmark, and that there should be.
The Bill will reduce the scope for abuse by public relations companies and others who may use the title when they have no representative function. It will prevent also the use of grandiose geographical descriptions; although I exempt Wessex, in light of the comments of the hon. Member for Somerton and Frome (Mr. Heath).
It will be far better to have the matter on a solid, statutory footing, while giving the British Chambers of Commerce and the Scottish Chambers of Commerce the opportunity to be involved in strong self-regulation.
The Opposition welcome the Bill and pay tribute to the chambers of commerce, which have made great strides in recent years in accreditation, quality-assured services, sensible mergers, more comprehensive geographical coverage and, in some areas, the close work between chambers and training and enterprise councils.
The Bill will remedy the weaknesses in the current regime and will reinforce the steps that are being taken to give chambers of commerce the role that they merit. Local authorities in my area and across the country will be pleased that an extra element of protection will accompany the improvements that have been made. In North Hertfordshire and East Hertfordshire—where the Conservatives gained both councils yesterday—that will be the case.

Mr. Byers: I am delighted to be here to support the Bill. I congratulate the hon. Member for South Cambridgeshire (Mr. Lansley) on the way in which he has dealt with the issue, and on the way in which he has ensured that there has been a cross-party coalition in support of the Bill. As the hon. Member for North-East Hertfordshire (Mr. Heald) said, it is difficult to get agreement in this House on almost any measure; even on one that appears to be non-contentious. The hon. Gentleman has done extremely well to achieve such a level of support for the Bill.
The Government have a positive and constructive working relationship with the British Chambers of Commerce and the Scottish Chambers of Commerce, and we are working together to drive forward the competitiveness agenda. It is vital that chambers of commerce continue to be business-led, and that their membership is controlled.
The hon. Member for Gainsborough (Mr. Leigh) referred to his experience as a DTI Minister and to the view of the then Secretary of State, the right hon. Member for Henley (Mr. Heseltine), that chambers of commerce were almost an arm of the Government, as they were proactive and part of what the Government wanted. Our view is that there should be an arms' length relationship, and that chambers of commerce should be responsible for issues of concern to their members. The priority for the chambers must be what their members want. On occasion, there may be conflict with the Government; so be it. That is one of the strengths of our democracy.
We are working positively with the chambers of commerce and we wish to continue the partnership. We have studied the Bill—which we know the chambers are keen to have on the statute book—and we believe that it is appropriate to legislate in this way. We do so to rule out abuse by organisations which, for their own reasons—perhaps to mislead or deceive—use the description "chamber of commerce" or the variety of other descriptions that can flow from that.
We must not rule out the possibility of other groups coming forward in a proactive way to represent the interests of the business community. We want to rule out abuse but not to deny other bodies the opportunity to be described as chambers of commerce if they so wish. It will be for the Secretary of State, considering the guidance that will have been published, to determine whether such an application should be agreed.
I listened carefully to what the hon. Member for Somerton and Frome (Mr. Heath) said, using the example of the Wessex chamber of commerce. His points are well


made, and when the Department considers these matters, those are exactly the sort of issues that we will want to take into account.
I was pleased that officials from the Department were able to assist the hon. Member for South Cambridgeshire with the Bill. The Bill will apply to Great Britain and it will be for the new Northern Ireland Executive to make proposals for consideration by the Northern Ireland Assembly on any changes in legislation that might be needed for Northern Ireland.
We warmly support the Bill and look forward to working in partnership with the British Chambers of Commerce and the Scottish Chambers of Commerce. We believe that the Bill creates a clear and workable statutory basis for consultation with those bodies on company and business names, and I commend it to the House.

Mr. Forth: I think that I welcome the Bill but I am not yet wholly convinced, despite the eloquence of my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), its promoter, whom I, too, congratulate on piloting it so skilfully to this stage.
I join all those who have welcomed the Secretary of State. It is a great pleasure to see a Secretary of State taking the trouble to be here on a Friday for a Bill that is of importance to his Department. We all greatly appreciate his presence.
I am somewhat puzzled. The briefing from the British Chambers of Commerce says:
Companies House seeks the opinion of BCC on new applications but there is no legal requirement to do so … There is no definition in British law of a Chamber of Commerce.
Then, intriguingly, it says:
This Bill would solve these problems by providing an acceptable and meaningful definition of the term 'Chamber of Commerce'.
It does no such thing: I can find no definition of the term in the Bill. If that is what the British Chambers of Commerce was looking for, I do not think that the Bill provides it.
That leaves me slightly at a loss, but if the promoter of the Bill, who has worked so closely with the BCC, and the Secretary of State reassure me that the BCC has got what it wants, I suppose that must be the case. I hope that the BCC will not be disappointed when the legislation is implemented.
I was grateful to my hon. Friend the Member for South Cambridgeshire for taking a bit of time to cover the issue of what he and I have come to know as reversibility. I was grateful, too, to my hon. Friend the Member for Gainsborough (Mr. Leigh) for the points that he made on that issue.
Those points were not covered in our rather brief proceedings in Committee and on Second Reading. The value of Report has been demonstrated yet again. It enables those who were not privileged to serve in Committee to have some input and it allows points that may have arisen on Second Reading and may or may not have been dealt with in Committee to be reconsidered by the House as a whole.
This has been a useful example of the value of the Report stage, even when the Bill has, as my hon. Friend the Member for South Cambridgeshire told us, emerged
unscathed from Committee. As for reversibility, I remain uneasy, but obviously I will have to accept what has been said today.
My hon. Friend the Member for Gainsborough, with his usual eloquence and force, has said that he hopes, as I do, that the Bill will not provide a mechanism to reinforce the status quo and protect those who have title to use the term "chamber of commerce" regardless of their performance and value.
We also hope that there will be sufficient flexibility in the mechanism to allow for the removal, where justified, of such a title, and for newcomers to come onto the scene if they are providing either something new or—this is a horrible phrase but I shall use it—added value.
My suspicion all along has been that we are reinforcing the established order, ensuring that there is not much of a threat to it, and then walking away rather satisfied. My hon. Friend the Member for South Cambridgeshire has said repeatedly that that is not the case, and has told us that the Companies Act 1985 makes proper provision for the removal of the title, where necessary, by the Secretary of State.
That is good and I am reassured—although if the provision already exists in companies law, that leaves open the question: how necessary is the Bill? However, the chambers of commerce believe that it is necessary, and my hon. Friend was sufficiently persuaded by the case for the Bill that he used that most precious of opportunities, a high place in the ballot for private Members' Bills, to introduce it. That in itself signifies the importance that he attaches to the subject. The Secretary of State, too, has reaffirmed that his Department is enthusiastic about the Bill, saw it as necessary and gave it help and support.
All in all, therefore, although I remain somewhat uneasy about some elements of the Bill, I sense that having got this far, it has support in all parts of the House. I am therefore content for it to be given a Third Reading and be sent winging its way to the other place, where no doubt it will receive a different kind of scrutiny from a different perspective.

Mr. Darvill: I support the Bill, and I can reassure the right hon. Member for Bromley and Chislehurst (Mr. Forth) that the definition of the term "chamber of commerce" is clearly covered in clause 1, which says that it is contained in regulations pursuant to section 29(1)(a) of the Companies Act 1985 and section 3(1)(a) of the Business Names Act 1985.

Mr. Forth: I am grateful for the hon. Gentleman's help, and his legal expertise, but my point was that if the definition is already in other legislation, the need for it cannot be used as a justification for this legislation.

Mr. Darvill: The point that I was making was that the Secretary of State's ability to secure the term "chamber of commerce" is specified in regulations pursuant to those sections. The point of the Bill is to bridge the gap in existing legislation, and the need for it has been clearly demonstrated not only on Second Reading and in Committee but today on Report. I agree with the right hon.


Gentleman about the importance of Third Reading, which has enabled the House to focus on two of the major points, on which debate and reassurance were clearly needed.
I add my congratulations to the hon. Member for South Cambridgeshire (Mr. Lansley), whose expertise on the subject has been demonstrated throughout proceedings on the Bill. I am sure that all hon. Members will endorse those congratulations. The hon. Gentleman has done a service to the House and the business community as a whole. I am sure that my local chamber of commerce in Havering welcomes the Bill. It is a good sign that all parties in the House are working to support the business community, and I hope that the Bill receives a Third Reading.

Mr. Leigh: When historians write the history of Friday, 7 May 1999, I fear that they will not dwell at length on the passage of the Bill. That will be unfair. However, they will dwell on the fact that a new Parliament, for better or worse, has been created in Scotland. The Report stage of the Bill showed that this old Parliament can scrutinise legislation effectively and improve it.
We have had an excellent debate this morning. As usual, my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) responded to arguments with skill and sensitivity. It is welcome that, on a Friday morning, we have been joined by an existing member of the Cabinet and by my hon. Friend who—according to today's newspapers—may shortly join the shadow Cabinet. He well deserves that honour for the skill that he brings to our debates. I hope that I have not ruined his chances by saying that, because I was trying to pat him on the back for what will be a good Act of Parliament.
The Secretary of State gave the House various assurances today. He said that he does not see the Bill as an interventionist measure and that he intends to deal with the issues with a light regulatory touch. Reference has been made to Nicholas Ridley and, listening to the Secretary of State, one is left with the impression that he would have enjoyed serving under the late Nicholas Ridley, because their views are similar. The Secretary of State stressed that he sees the chambers of commerce as a business-led organisation with which he does not wish to interfere any more than is necessary.
The Secretary of State also wishes to ensure that there is no abuse of the system. As I understand it, that is the purpose of the Bill, because it will provide a mechanism for the Secretary of State to issue guidance on how chambers of commerce may properly be set out and allow the British Chambers of Commerce to be consulted when a proposal is submitted. That appears to be an unremarkable hope and I am sure that the Bill will achieve it.
I hope that my hon. Friend the Member for South Cambridgeshire is not unhappy with what my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) and myself have tried to achieve this morning. 1 hope that he agrees that our arguments have been sensible, because we do not wish to adopt the rigid structure that appertains in many continental countries. I do not criticise those countries for the way in which their chambers of commerce operate, because they are effective. However, they are an arm of government, albeit a quasi-independent arm of government. We have a different tradition, and I know that my hon. Friend does not wish to adopt the continental approach. He is convinced that the Bill will not make that more likely.
My right hon. Friend the Member for Bromley and Chislehurst and I have made the point that if someone wishes to set up a new chamber of commerce, the Secretary of State will consult widely, if necessary, and will not just take the view of the existing establishment in the British Chambers of Commerce. That point must be emphasised. I hope that the Secretary of State has also accepted the important point about the geographical descriptor. It is important that a thousand flowers should bloom in the chambers of commerce movement and small market towns, such as Gainsborough, should have their own chamber of commerce, albeit under the umbrella of county or even regional chambers of commerce. My right hon. Friend shares that view and has made it clear that if the existing structure in any county, town or city is not working satisfactorily, a new organisation can come forward and should not be turned down because there is a pre-existing organisation.
We have received reassurances, on the basis of which the Bill will be effective. I wish it well.

Mr. Lansley: With the leave of the House, I thank right hon. and hon. Members on both sides for their contributions. I must say to my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) that, as the British Chambers of Commerce have said, the Bill should give statutory backing to the issuance by order of the Secretary of State of guidance that will set benchmarks for what is defined as a chamber of commerce. That would not be possible without legislation.
A balance needs to be struck, raising the point of whether that should be done in the Bill or through secondary legislation. The latter is both more flexible and more manageable as chambers of commerce may change their remits, particularly when training and enterprise councils and chambers of commerce merge. They have done so in the past and may do so again in future.
I am grateful to all hon. Members who have spoken, and I hope that the House will feel it right to speed the Bill on its way. Finally, I thank the Secretary of State for the time and attention that he has given to the Bill. The chambers of commerce will appreciate that, and I hope that they will also appreciate the spirit and detail in which we have scrutinised the Bill.

Question put and agreed to.

Bill accordingly read the Third time, and passed.

Orders of the Day — Breeding and Sale of Dogs (Welfare) Bill

As amended, in the Standing Committee, considered.

New Clause 1

ANNUAL REPORT

`Each local authority shall publish and present to the Secretary of State on an annual basis a written report stating—

(a) the number of licences granted or renewed to breeding establishments in the local authority area;
(b) the number of applications refused;
(c) the number of convictions under sections 4 and 9 of the Act;
(d) the number of disqualifications under section 5 of the Act;
(e) the number of appeals against convictions and disqualifications; and
(f) any other relevant matter as may be prescribed by the Secretary of State.'—[Mr. Maclean.]

Brought up, and read the First time.

Mr. David Maclean: I beg to move, That the clause be read a Second time.
The clause imposes a new requirement on local authorities. I am largely satisfied with the Bill as it appears before the House. It is much better than the Bill that came before the House last year. What is more, we have the chance to give it a proper Report stage and Third Reading. We are able to explore issues that have been raised with me, although I do not intend to try to force changes in the Bill that would not be acceptable to the coalition of organisations—or to the Under-Secretary of State for the Home Department, the hon Member for Knowsley, North and Sefton, East (Mr. Howarth), or my hon. Friend the Member for Hertsmere (Mr. Clappison)— that has come together to try to make the Bill workable.
Having said that, we should consider some issues to ask whether the Bill could be improved, whether it contains something unnecessary or whether its provisions may contain any retrograde step. I hope that those who read Hansard once we have completed our deliberations will see that we have considered all the points that may worry them. I hope that they will conclude that the House accepted or rejected new clause 1 and the other amendments that I have tabled after full consideration and for sensible reasons. I hope that they will see that we have produced the best possible legislation to deal with a vexed problem.
The new clause would place an obligation on local authorities to publish a report and present it the Secretary of State. That obligation would not be too onerous on local authorities. Local authorities regularly have to present reports. They are bound by various charters and have to report on many aspects of how they conduct their affairs to the Secretary of State. In any case, most local authorities will want to state in their annual report to their electorate how well they have been operating various aspects of their business. Usually, they report on how well they are doing on environmental health issues, for example, giving the number of inspections carried out and so forth.
One obligation on local authorities is the licensing regime, which is set out in clause 1. The improvement under the Bill will be the involvement of veterinary practitioners in the reports and in coming to conclusions, which will add a professional expertise that was absent.
Since we have new legislation that is imposing new obligations, it would be worth while for local authorities to present a report stating how many licences have been renewed for breeding establishments in their area. We need to know whether the legislation is biting. We have all read about the awful examples of puppy farms in the country. I think that most of the original examples were in Wales. I make no slight on the new Welsh Assembly—indeed, it could not be a slight as the elections were only held last night for that body—or the Welsh people and I am not criticising breeders in Wales in particular. However, advocates of the legislation and those who say that something must be done always seem to quote examples of puppy farms in Wales.
People have different concepts of what constitutes a puppy farm. Some believe them to be huge places with hundreds of breeding bitches, while others rightly point out that the abuse can be as wicked, with the breeding of inappropriate dogs with genetic deformities, and the conditions in which animals are kept as horrific in a small operation. Whatever one's concept of the breeding establishment—the Bill gives a definition—it is important that local authorities report on how things are going.
In this place we have a tendency when we pass legislation to say on Third Reading, "This is a wonderful Bill. It is a great improvement and a great step forward." This Bill represents a great step forward compared with present legislation, but everyone knows that it is by no means perfect. The organisations that have come together to assist in its drafting all accept that they have had to make some compromises on the Bill that they would have written were they solely in charge. Everyone has had to compromise, but nevertheless we will all say that the measure is a great step forward.
After a Bill is enacted, we have a tendency to think that we will not need any more legislation on the matter for a while. We will think that in 1999 we enacted the Breeding and Sale of Dogs (Welfare) Bill—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. It might be as well if I reminded the right hon. Gentleman and the House that the scope for discussion on the new clause is very narrow. An occasional reference to the title of the clause and the need for an annual report does not excuse remarks that cover the substance of other clauses. The new clause would provide for local authorities to report in writing to the Secretary of State on the exercise of the powers conferred by a number of clauses in the Bill. It is not an opportunity for a Second or Third Reading debate.

Mr. Maclean: I accept your admonitions, Mr. Deputy Speaker.
The areas that I selected on which local authorities should report in new clause 1 represent some of the key powers conferred by the Bill. One has to be the number of licences granted or renewed to breeding establishments in the local authority area. It will be particularly useful to the Secretary of State and to hon. Members to know how many licences have been refused—that provision is in


paragraph (b) of the new clause. We want to know how many have been renewed and how many refused. We also need to know, as paragraph (f) provides,
any other relevant matter as may be prescribed by the Secretary of State.
I hope that, if my hon. Friend the Member for Hertsmere accepts new clause 1, one of the relevant matters might be that local authorities would have to give explanations of why licences were refused. The bare statistics on refused licences are relevant. If more licences have been refused than in previous years, is it a statistical quirk or are local authorities applying the law more tightly? If so, it would be helpful for us and the Secretary of State to know the reasons.

Mr. Peter Atkinson: I do not understand my right hon. Friend's logic. If a local authority's annual return to the Secretary of State said that it had issued 12 licences and refused none, that there were no convictions under clauses 4 and 9, no disqualifications under clause 5, no appeals against conviction or disqualification and no relevant matters, does that mean that the local authority is doing a good or bad job?

Mr. Maclean: I accept my hon. Friend's point. One could not come to a conclusion on the quality of local authority inspection or whether it was licensing in the same way as an authority that had refused the 12 licence applications that it had received. There will be disparities between local authorities. That is where new clause 1(f) comes in. It provides that authorities can report
any other relevant matter as may be prescribed by the Secretary of State.
Even with my inadequate wording, it might be possible to have a quality control threshold. The Secretary of State might ask authorities to respond in terms of best value. I am not sure whether local authorities would be inspected on their enforcement of the Bill, but the Government are insisting on best value throughout the country. Rightly, part of that regime will be audit or quality control. I accept that the inadequate wording of my new clause means that we cannot be sure whether a local authority is doing a good job by refusing every licence or a sloppy one by granting them all. Paragraph (f) would allow the Secretary of State to build in mechanisms to allow us to make a guess about that or at least to get some information.
I do not want to labour my point in advocating new clause I because I have another important new clause on which I wish to speak and I know that other hon. Members want to contribute, but I want to touch on convictions. It is important to get a report on them from local authorities. The Minister may say that they are covered somewhere in the annual digest of convictions published by the Home Office. If we ploughed through it, we would find the convictions for various offences and crimes. After much study, we might find those that relate to animal offences or breaches of the Breeding of Dogs Act 1973. Those of us who take an interest in such matters would find it helpful if local authorities responsible for dog licensing and taking out prosecutions included in their reports to the Secretary of State their conclusions on the number of convictions under clause 4, which deals with imprisonment for keeping an unlicensed establishment. Clause 9 deals with the penalties in respect of clause 8 on

the sale of dogs. It would be helpful to have information on convictions under clauses 4 and 9 and information from local authorities on disqualifications under clause 5.
Those who are concerned about inappropriate dog breeding and puppy farming need to know the number of people who have been struck off and the extent of the abuse so that they can get a measure of their success in trying to deal with it. The fact that a local authority may be highly successful in dealing with it is pertinent information to which the rest of us have a right. It would be helpful if other local authorities could see success rates.

Mr. Atkinson: I am grateful to my right hon. Friend for giving way to me a second time. Again, I have lost the logic of his argument. There might be several breeding establishments in some local authority areas—for example, those in rural areas such as those that he and I represent, where people often do such work as a sideline. However, if my right hon. Friend represented Kensington and Chelsea, the chances of finding dog-breeding establishments in that area would be most unlikely—although it is possible that there might be some. My right hon. Friend is comparing one quite different local authority to another; it is difficult to compare the activities of local authorities in rural and urban areas.

Mr. Maclean: I accept my hon. Friend's point; it may be difficult to compare their activities. Nevertheless, each local authority would have to enforce the same legislation that is passed by the House. If my new clause were accepted, they would be under an obligation to report the same matters.
I think that my hon. Friend's point is not that what I suggest in the new clause is wholly wrong in concept, but that the new clause may be inadequate to deal with what is—yet again— a quality control measure. It is true that the number of people disqualified may vary in different authorities, depending on how active a local authority is in making prosecutions and on how many people are convicted. It will vary according to the attitude of the courts; courts in some areas may take a dimmer view of inappropriate activity under the breeding and sale of dogs legislation than those in other areas. One would hope not. However, the range of penalties will differ. Furthermore, when people are disqualified, there will also be differences from area to area.
Nevertheless, it is worth knowing how local authorities are proceeding, in order that such information can be shared not only by the Secretary of State, but by other local authorities and the rest of us. One of the small, but important, points in my new clause is that
Each local authority shall publish and present to the Secretary of State".
The benefit of publishing is that it would allow best practice in local authorities to be shown. They could publish anywhere, either in a written document that people could read and say, "Ah, that's the way they're doing it in that local authority", or by putting the information on the internet or on their web pages. Many local authorities now do that with their annual reports and their charters. I commend that as a good way for local authorities to make that information easily available for people to see.


By sharing best practice, we will make substantial improvements to animal welfare throughout the country. We may also achieve greater consistency in the enforcement of the provisions of the legislation, as local authorities take courage and take heart from the ways in which others carry out the provisions. When they study the published reports, they will be able to see the style and format. They will also be able to see any important matters referred to by the Secretary of State under paragraph (f) of the new clause. If he prescribes some quality control measures, the authorities will be aware of how others are carrying out such matters. That will be of general benefit.
I conclude by pointing out that I have suggested new clause 1 as a possible improvement. I am happy to accept the view of my hon. Friend the Member for Hertsmere or of the Minister that it is not necessary and that it is not an improvement, or that it would destabilise the coalition of interests that has come together to get the Bill into a negotiated state. I think that my new clause is a possible improvement. I should be happy if my hon. Friend accepts the substance of the new clause. Perhaps, in another place, we may come up with better wording or suggest a better means of drafting it. I should be happy if the Minister suggested that. At present, I commend the new clause to the House as worthy of some consideration.

Mr. Peter Atkinson: In another debate earlier today, my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) mentioned his suspicions of Bills that were consensus Bills. My suspicions too are aroused, because this is a consensus Bill. It was not debated on Second Reading, as it received an unopposed Second Reading several Fridays ago. It was discussed only briefly in Committee. Therefore, at this late stage, on Report, it is right that we test the Bill as much as we possibly can, to ensure that it has a reasonable chance of achieving that which it seeks to achieve. The test of a Friday morning Bill that tries to increase regulation or prevent people from doing things is whether its outcome is worth the bother. New clause 1 does not in any way compensate for the Bill's central weakness—the difficulty in identifying a puppy farm. I am sure that my hon. Friend the Member for Hertsmere (Mr. Clappison) will discuss that weakness at a later stage of the Bill.
New clause 1 seeks to place an additional burden on local authorities. That is unacceptable, unless it can be shown that the Bill is strengthened by making local authorities undergo such a rigorous and bureaucratic procedure. As I tried—possibly not successfully—to point out in an intervention on my right hon. Friend the Member for Penrith and The Border (Mr. Maclean), I cannot see what use it would be if one local authority said that it had had no appeals, no convictions, no disqualifications and no relevant matters of discussion, whereas another local authority said that, in the same year, it had turned down two licences and prosecuted once. That would not allow comparison between the performance of different local authorities. That is a weakness of the new clause.
If local authorities are given that burden and they report a nil scoresheet—if I may use that cricketing expression—it will aggravate dog lovers. We know what the British or the English dog lover is like. If dog lovers were to think that their local authority was not properly doing its job of

looking after the interests of dogs, they would get very angry with that authority, even though it might be doing a perfectly good job. There might simply be no such establishments or identifiable establishments in its area. What a waste of time.
In another sense, legitimate breeders of dogs might be damaged. If one gives a local authority a sensitive target such as this one, it becomes rather like the parking warden who must issue a certain number of tickets to show that he is doing his job properly. We do not want local authority environmental health inspectors or enforcement officers—or whoever is given the duty—to run a league table to see how miserable they can make the life of perfectly legitimate and responsible dog breeders in the local authority area. There would be a temptation for local authorities to seek to interfere hugely and over-burdensomely in such establishments.
Local government already has enormous duties associated with environmental health, and new clause 1 would impose even more burdens. The House is in danger of initiating a chain of events, as it has done repeatedly before, by which the House passes the buck to local authorities to do things that we think are good. Hon. Members think that this Bill is a thoroughly good thing, so we shall pass it—and, by the way, the local authority will implement it. Then the local authority meets and decides what it will do, and passes the burden to the environmental inspectors. Those inspectors are then given that job, on top of all their other multifarious jobs.
My right hon. Friend the Member for Penrith and The Border must show that new clause 1 will significantly improve the Bill and correct what I perceive to be the Bill's essential weakness. He has not done so, so the House should reject new clause 1.

Mr. Andrew Dismore: I have sympathy with the arguments expressed by the right hon. Member for Penrith and The Border (Mr. Maclean) and the hon. Member for Hexham (Mr. Atkinson). I agree that we should try to ensure some consistency in enforcement of the new legislation—assuming that it passes—but I am also worried that a disproportionate burden may be placed on some local authorities.
I am unaware of any dog breeding establishments in my constituency, yet presumably, if new clause 1 were passed, the local authority would be required to submit some sort of nil return. For the reasons given by the hon. Member for Hexham, I am concerned that that may generate concern among the—very strong—animal welfare lobby in my constituency as to why action is not being taken. We would then see all sorts of correspondence in the local papers about why we were not taking action against non-existent establishments.
I think the proposed new clause will place a disproportionate burden on my local authority, which has plenty to do already. If it were to establish a threshold in terms of the number of licences issued or make some other requirement before imposing obligations on local authorities, I might have more sympathy with it. That would ensure the consistency that the right hon. Member for Penrith and The Border seeks regarding the proper licensing and policing of establishments. However, we must not impose unnecessary obligations on the vast bulk of local authorities.
The Bill correctly places responsibility for enforcement on local authorities, which reflects local conditions and concerns. However, I am not sure why local authorities


should provide annual reports to the Secretary of State. What will that achieve? What will the Secretary of State do with those reports and all of that information? Will he put the reports in a filing cabinet and forget about them, or will he be obliged—this requirement is not in the new clause—to produce a report consolidating all the other reports? The next thing we know is that we will have an incredibly complicated bureaucracy and we will be using a sledgehammer to crack a walnut, given the relatively narrow geographical location of such establishments.

Mr. Maclean: I think the Secretary of State should be involved in the process because he may make regulations under clause 2 of the Bill, which relates to licensing conditions. As the Secretary of State has that regulation-making power, he should receive the reports so that he will know what is going on.

Mr. Dismore: I am grateful to the right hon. Gentleman for those comments, which clarify his argument.
If there were problems in enforcing the legislation, I am sure that they would be highlighted by the animal welfare lobby, which is very well organised—I am happy to be associated with it. It has been said that this is something of a compromise Bill: many hon. Members would like to see the legislation include other objectives that are not achievable at this time. So I question whether a great deal will be achieved by passing reports to the Secretary of State. I hear what the right hon. Gentleman says, but that will inevitably put pressure on the Secretary of State to start producing his own report on the subject.
I do not support the proposed new clause because I do not think it adds to the force of the Bill. We know that the groups involved are very well organised and that they will highlight any problems. I am sure that the Royal Society for the Prevention of Cruelty to Animals and other organisations will ensure that there is co-ordination between enforcement bodies. While I sympathise with what the right hon. Gentleman is trying to achieve, I believe that the proposed new clause goes a little too far.

Mr. James Clappison: I have listened carefully to the arguments that have been advanced this morning, particularly by my right hon. Friend the Member for Penrith and The Border (Mr. Maclean). I am grateful for his general support for the Bill and for the thoughtful way in which he proposed the new clause.
My right hon. Friend was correct in saying that the Bill has flowed from the work of 11 major organisations representing animal welfare, dog breeders, local authorities, the veterinary profession and the pet care industry. They have worked together closely to lay the foundations of the Bill, which strengthens existing legislation, closes loopholes and addresses the serious problem of some—but not all—large breeding establishments where standards fall well short of the desired levels. I emphasise that the legislation is aimed not at the responsible small hobby breeder but at the irresponsible minority of large breeding establishments.
The Bill does not intend to impose inappropriately burdensome requirements either on those who must enforce the legislation or on those who must comply with it. In that context, I turn to the contents of new clause 1 as I think the contributions by my hon. Friend the Member for Hexham (Mr. Atkinson) and the hon. Member for Hendon

(Mr. Dismore) have demonstrated that there are some grounds for concern that the requirements that it imposes on local authorities would be inappropriately burdensome. I understand my right hon. Friend's worthy objectives in tabling the new clause, but I wonder whether it is entirely appropriate for the burdens set out in it to be imposed on local authorities. I understand that it is tempting, with a Bill such as this, to try to lay on local authorities a requirement to publish and present reports. I have no doubt that, in some instances, there is a good case for doing so, but I am not entirely convinced that the case has been made on this occasion. I listened carefully to the interesting arguments that my right hon. Friend advanced.
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I am also concerned about the open-ended nature of the requirement under paragraph (f), which refers to
any other relevant matter as may be prescribed by the Secretary of State.
That is a requirement that local authorities might have to report back on "any other relevant matter". In another context—my right hon. Friend will know what I mean—I have come to take rather a jaundiced view of open-ended requirements under secondary legislation. That jaundice extends to the requirements that we are considering.
In considering the new clause in its entirety, I am concerned that it may be inappropriate, and burdensome on those who have to enforce the Bill. I do not, of course, know what view the Government take. The Minister is better placed than us to form a view of how burdensome the new clause would be, but I suspect that it would, indeed, be burdensome.
During consideration of the previous Bill some tributes were paid to the Secretary of State for Trade and Industry for attending the debates. I have no doubt that the right hon. Gentleman was present because the House was considering a very important piece of legislation. I am grateful to the Under-Secretary of State for the Home Department for the personal interest that he has shown in the Bill and for the support that he has given it. I have no doubt that that interest and support will be reflected in his contributions on Report. We have had a useful debate and the sentiment behind the new clause is worthy, but I am not sure that the case for it has been made.

The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): As the right hon. Member for Penrith and The Border (Mr. Maclean) rightly said, the new clause would require each local authority annually to submit a report to the Home Office on the operation of this proposed legislation to regulate dog breeding establishments. Enforcement is a key element in the effectiveness of legislation: if it is not enforced, it will not be effective.
It is well known that there is room for some improvement in the area to which the Bill relates, but local authorities have said that the problem of enforcement is that there are loopholes in existing legislation. They say that there is no lack of will on their part to deal with the problems mentioned by the hon. Member for Hertsmere (Mr. Clappison), for whose kind comments I am grateful. The point of the Bill is to close existing loopholes.
As the hon. Members for Hertsmere and for Hexham (Mr. Atkinson) and my hon. Friend the Member for Hendon (Mr. Dismore) have said, it would be bureaucratic


if an annual report had to be compiled by every local authority. The requirement would mean that the Home Office would have to analyse the statistics and produce a report itself. That might be an internal report.
I hope that the right hon. Member for Penrith and The Border will accept that the new clause would make the Bill unnecessarily cumbersome. It is obviously right that we should try to ensure that the Bill is implemented properly, and, to ease the right hon. Gentleman's mind, I give him the commitment that the Home Office will review the situation after a reasonable period following the Bill's enactment. We shall subsequently determine whether it is necessary to introduce more prescriptive reporting procedures such as those that the right hon. Gentleman describes; and, if so, whether that might be dealt with in guidance to local authorities—which we are already able to issue. Those remedies are available if we feel that is necessary to use them. Moreover, as with all legislation, we shall keep an eye on how the provisions work after implementation.
I therefore hope that the right hon. Member for Penrith and The Border will accept that we shall be vigilant, and that, if it is necessary to issue guidance to local authorities requiring them to record and report in greater detail, we shall do so. At this stage, however, I prefer to give authorities the opportunity of using the Bill in trying to get to grips with the problem.

Mr. Maclean: I am very grateful to the Minister for his customarily courteous and sensible reply. In the circumstances, I am willing to accept his assurances. He has been brave enough to breach the Home Office wisdom of the past few years, which has been, "Don't touch legislation on dogs," and to get involved. Although, on a previous Friday, he was not fortunate enough to ensure the Bill's passage, his involvement today—with that of my hon. Friend the Member for Hertsmere (Mr. Clappison)—may prove to be more productive.
The Minister's offer was satisfactory. However, I should like just to reply to one small point made by my hon. Friend the Member for Hertsmere. He said that the legislation is designed to catch the big breeders, not little hobby breeders. I appreciate that, but let us not turn a blind eye to bad welfare conditions provided by little hobby breeders. Let us not assume that, because someone is a small breeder, their animal welfare is very good: it could be deplorable.
Nevertheless, in the light of the Minister's assurances, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 4

BREEDING OF DOGS: OFFENCES

`The keeper of a breeding establishment shall be guilty of an offence if he—
(a) breeds a dog without previously gaining a certification from a veterinary practitioner or veterinary surgeon that both the bitch and the sire were in a fit state for breeding purposes and that they were not suffering from any congenital defects; or

(b) knowingly mates two dogs who are brother and sister.'.—[4r. Maclean.]

Brought up, and read the First time.

Mr. Maclean: I beg to move, That the clause be read a Second time.
New clause 4 is perhaps more important than new clause 1, particularly as it mentions the problem of
suffering from any congenital defects".
When I say that the new clause may be more important, I mean that the problem with which it deals is a vitally important one which one day—with or without the assistance provided by the mechanisms in the Bill—I hope that dog breeders and veterinary organisations will be able to get to grips with and stamp out.
I am conscious that—as with new clause 1—if I am too keen in my advocacy of the new clause, I may destabilise the consortium that has formed to ensure the Bill's passage. Nevertheless, I should like to float the ideas expressed in the new clause. Perhaps, in another place, the provision will be considered, and a better or shorter version of it will be tabled, to deal with the problem of congenital defects.
Paragraph (b) deals with the breeder who
knowingly mates two dogs who are brother and sister.
It will be obvious to everyone concerned that I am an expert neither in veterinary matters nor in dog breeding practices. However, I am interested in the effects of breeding and in the progeny of such dogs. I should be desperately concerned if breeding malpractice caused congenital defects which would be very painful and very expensive to correct.
Of the 39 member states of the Council of Europe, 11 have signed and ratified the European convention for the protection of pet animals. The United Kingdom has not yet signed up to it. Article 5 was amplified by a resolution, adopted in 1995, encouraging breeding associations to reconsider breed standards to counteract development of the extreme characteristics that may cause welfare problems, by taking into account the anatomical, physiological and behavioural characteristics likely to put at risk the health and welfare either of the offspring or of the female parent.
The convention indirectly advises against the use of line or incestuous breeding. Constantly breeding brothers and sisters together, all too frequently results in dogs with odd behavioural characteristics. Incestuous breeding of cocker spaniels in one line can result in spaniel rage. Such breeding can produce dogs that are mad or hyperactive or have other behavioural problems.
I should also put forward the opposing arguments to ensure that those with different views have their points represented. I am happy for my hon. Friend the Member for Hertsmere (Mr. Clappison) to say that my argument may be a good one but would cause problems in the Bill and should be dealt with in other legislation. The contrary point, as dog breeding organisations have pointed out, is that introducing such a restriction on mating dogs who are brother and sister would result in the disappearance of the breeds of dog that we know, love and cherish because of the characteristics that we see on the television at Crufts. Those breeds have come about because of inbreeding. Fathers are put to daughters, grandfathers to granddaughters and brothers to sisters. Once a certain


genetic trait has been found in an animal and there is a litter of puppies in which the males and females have a particular good quality—it might be the length of leg, conformity, coat order or an ability to sniff out game—people breed the brothers and sisters in the hope of getting more puppies with similar characteristics.
The top champions are apparently a result of such selective breeding over generations. It frequently involves what we would consider in human terms to be incest but what in animal husbandry can be regarded as a harmless form of animal eugenics that produces a dog of a particular nature. I am told that line breeding is frequently tempered by outbreeding to other lines. Occasionally an outside line of dog is bred in, avoiding the marginal risks arising from line breeding and preventing the canine madness that may be possible in some species.
I have presented the arguments on both sides. I am in no position to judge. I leave it to my hon. Friend, the Minister or the veterinary profession to do so. I am happy to accept their judgment if paragraph (b) is not helpful in the process of getting the Bill on the statute book.
Paragraph (a) deals with the very difficult issue of congenital defects. The problem has to be tackled sooner or later, perhaps by legislation. It is currently being tackled by voluntary means through the British Veterinary Association, the Kennel Club and, for congenital eye problems, the international sheepdog society. The horrific scenes that we frequently see on puppy farms are well documented. Animal welfare groups can quote them and show pictures. The clause would be a radical improvement on existing welfare provisions for breeding bitches by ensuring that they were physically fit enough to cope with the rigours of pregnancy.
We know that there are hundreds of unlicensed puppy farms in Britain. It is estimated that there may be 70,000 puppies a year bred for profit from those farms. The dogs are usually sold to middlemen for cheaper than the usual price. They often have undetected health problems, and that is the iniquity. People buy puppies that are only a few months old. A vet can tell whether a puppy may have a problem, but potential purchasers are often unaware that it has congenital defects that will come to light later resulting in agony for the dog. In some cases they have to be put down, but many undergo expensive surgery and veterinary treatment and the new owner still does not end up with a fit and active dog.
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Unlike horses, which are generally vetted and checked out before purchase, puppies are usually sold on sight. We can improve the health of puppies and try to eradicate the sale of congenitally diseased puppies by trying to ensure that the parents are healthy specimens. The new clause would ensure that in future people buying puppies will not be saddled with the financial and emotional burden of discovering that they have bought a desperately sick animal.
As there are no veterinary surgeons in the House, we are all average dog owners who are not well versed in the intricacies of dog ailments. When we make judgments on buying puppies, I suspect that most of our concerns will be emotional ones. We will not be looking to see whether the legs are correct or whether there is a possibility of dysplasia or retinal problems. We assume that the puppies are healthy.
In Committee, the hon. Member for Basildon (Angela Smith) mentioned a constituent who had bought a dog in good faith, only to pay a fortune in vet's fees as a result of its poor breeding and congenital defects. There are thousands of examples up and down the country. The new clause would ensure that the Bill addressed that problem.
Congenital ailments are an inherent problem in dog breeding and in many instances they can be avoided by careful selective breeding. The most common problems include heart problems, hip dysplasia, spinal problems and ingrowing eyelashes. A few years ago I saw a television programme about a breed of dog called the Shar-Pei—a Chinese breed that died out at the end of the last century. It had been recreated by breeding together the types of dog that were thought to have created the Shar-Pei in the first place. Although the breed had evolved from dogs breeding in China over thousands of years, it had been recreated by breeding together X, Y and Z types of dog. The result was a dog that looked like the original Shar-Pei breed although the skin folds are so intense that they get rotten diseases in the flesh. Worst of all, because of the way in which the dogs have been bred, they suffer from ingrowing eyebrows and eyelashes that cause awful pain and distress. That is the most extreme example of genetic breeding—trying to recreate a dog in a certain mould when the original species has died out.
In Britain, ordinary breeds of dog that we know and love—particularly retrievers and labradors—are being bred with hip dysplasia. When those dogs have puppies, they inevitably also have hip dysplasia. Hip dysplasia is a broad term that encompasses many developmental and other abnormalities of the hip joint. The simplest way to put it is that if someone buys a puppy with hip dysplasia, within 12 months they will have a crippled dog trying to drag itself around because it cannot walk. I shall not sicken the House with some of the details that the British Veterinary Association has supplied me with about hereditary eye diseases and other congenital defects relating to elbows.
At the moment, the British Veterinary Association, the Kennel Club and—in the case of the eye diseases of collie dogs—the National Sheepdog Society have a voluntary screening programme in an attempt to screen out all dogs with congenital defects so that people do not breed from them. If they do not breed from them, the problem is eradicated.
My new clause proposes that that process should be put on a statutory basis. That can be done relatively simply, as the British Veterinary Association has panels around the country that are capable of doing it. I accept that that will not deal with every problem, and that the reference in the new clause to the dogs being in a "fit state" for breeding has a severe weakness; a vet might not be able to tell, and the dog's owner might be in a better position.
Nevertheless, the second part of the sentence—
and that they were not suffering from any congenital defects
—could make a significant impact. It could be possible to deal with the common types of congenital defect, such as hip dysplasia, retinal dysplasia, collie eye anomaly, hereditary cataract, primary lens luxation—

Mr. Deputy Speaker: Order. The right hon. Gentleman is experienced enough to know that he is now indulging in repetition and remoteness. I would be grateful if he came back to the core of the new clause.

Mr. Peter Atkinson: Come to heel.

Mr. Maclean: I shall do as my hon. Friend suggests. The problem is that some dogs cannot come to heel because of congenital defects.
The new clause may have some deficiencies, as it deals with some vague and loose aspects. However, the part dealing with congenital defects is the most serious point. I believe that dealing with congenital defects in dogs and other animals used for breeding purposes should be tackled with more statutory backing than at present. If that can be done in this Bill, so be it, but I am happy to accept the assurances of my hon. Friend the Member for Hertsmere and the Minister that this Bill is not a suitable vehicle. However, I want the House to know that this is a serious problem that must be tackled.

Mr. Peter Atkinson: This is the kamikaze new clause from my right hon. Friend the Member for Penrith and The Border (Mr. Maclean), in that he is aiming at the right target but will probably die in the attempt. If he knows anything about the world of dog breeding, he will realise that he is treading in some extremely dangerous territory with the new clause. He will have had some experience of dog shows, and the people who take part in them—excellent people though they are—are terribly dedicated, and they all have strong and differing opinions. One of the problems for the dog world is to get any form of agreement on anything. That is the strength of the dog breeding world; it is also its weakness.
When my right hon. Friend refers, effectively, to seeking to outlaw line breeding, he moves into difficult territory as far as breed societies are concerned.
The new clause talks about "congenital defects". We may think we know what that means, but it is the subjective decision of a vet. Vets disagree profoundly on what is and what is not a defect in a dog. My right hon. Friend referred to hip dysplasia, and we would all agree that that should be bred out. It is right that dogs are scored for hip dysplasia, but the difficulty comes in other matters, such as breed standards. Although this would not be considered a congenital defect, there is great controversy among vets and breed societies about tail-docking.
There is considerable disagreement on whether the breeding that has taken place over many generations to turn a dog from a utilitarian dog to a show dog has caused a congenital defect. The classic example is the bulldog, which was obviously designed for the old-fashioned and unpleasant activity of bull baiting. It has now been bred into a completely different dog, but many would say that breeding to meet show standards has produced a dog with congenital breathing defects.
The new clause moves into territory that is better left to the breed societies and to the good sense of the professional breeders and those who buy dogs. Caveat emptor must apply. It is very bad news that members of the public who are ignorant of the problems that certain breeds are likely to have will buy dogs without having them properly vetted. Anyone wanting to buy a labrador should first demand that its hips are scored by a vet; anyone failing to do that would fall into the same category as someone who buys a second-hand car without having it properly tested. Although it may be damaging to the breed, one cannot protect fools from themselves.
There should be more publicity from the breed societies to ensure that people who want to buy pedigree dogs do so from respectable breeders whose dogs are properly

registered with the breed society and the Kennel Club. That, and not the new clause, is how we can overcome the problem.

Mr. Dismore: On the point about caveat emptor, if I intended to spend hundreds, if not thousands, of pounds on a dog, I would certainly get it checked by a vet first; but I fully accept what the right hon. Member for Penrith and The Border (Mr. Maclean) said about people getting caught by sentiment and putting their heart before their head. If somebody buys a dog that is found to have a serious congenital defect, with all the consequent vets' bills and so forth, redress may well be available under the Sale of Goods Acts, although that is a convoluted way of dealing with the problem identified in the new clause.
Subsection (b) of the new clause concerns in-breeding. I used to have a dog. She died about six months before the general election, of old age. She was absolutely fit until the day she died. She happened to be a mongrel, and there was no evidence whatever of in-breeding in her background.

Mr. Clappison: I listened carefully to my right hon. Friend the Member for Penrith and The Border (Mr. Maclean) who suggested some worthwhile objectives and expressed some very worthy sentiments. I can give him the general reassurance that the Bill's provisions will put animal welfare considerations at the heart of the licensing process for breeding establishments, by requiring the participation of veterinary practitioners or surgeons.
Dog welfare considerations, concerning overbreeding and breeding too young—practices that have resulted in some of the problems to which my right hon. Friend alluded—will be at the heart of the Bill. It is certainly extremely distressing when members of the public unsuspectingly buy puppies that turn out to have congenital defects and all sorts of problems
.
The new clause arises from worthy intentions but it may be a little on the impractical side. I await with interest the Minister's view, but it seems to me that the new clause would require a breeder to engage the services of a vet before each proposed mating. That would have very wide-ranging implications and, if that is the correct interpretation, I certainly would not want to go that far. I wait to hear the Minister's view, but I have some misgivings about the practicality of the proposal.
I hope that my right hon. Friend will be able to draw reassurance from the fact that the Bill tackles many of the problems inherent in some large-scale puppy farming establishments, and that it will go a long way towards solving them.

Mr. George Howarth: New clause 4 is intended to deal with a problem that the right hon. Member for Penrith and The Border (Mr. Maclean) described well, but the remedy that he proposes would impose undue and inappropriate regulation. It would make it an offence for a breeding establishment to breed a dog without the veterinary surgeon certifying
that both the bitch and the sire were in a fit state for breeding purposes and that they were not suffering from any congenital defects",
or knowingly to mate
two dogs who are brother and sister".


The proposed new offence should not be introduced, for two reasons. First, as the hon. Member for Hertsmere (Mr. Clappison) pointed out, it would require the breeder to call upon the services of the veterinary surgeon before each proposed mating. That would have resource implications, not only for the breeder but, down the line, for the purchasers of puppies.
Secondly—the hon. Member for Hexham (Mr. Atkinson) made the same point as I am about to make, although in a different way—a vet cannot always give an opinion on suitability for breeding. Indeed, the hon. Gentleman went further and said that often the owner would be better able to make that judgment than a vet called in to carry out an examination for that purpose.
Moreover, after the clinical examination, anything could happen. The vet could issue the appropriate certificate, then something could happen, as a result of which something could go wrong with the breeding. Then, when someone had bought the puppy, there might be litigation, not because anybody had done anything wrong but because something had changed between the issue of the certificate and the event.
I do not believe that a responsible breeder would deliberately mate dogs that were brother and sister—although I do not say that that would never happen, and I am being careful with my use of the word "responsible". As the right hon. Member for Penrith and The Border said, to do so would run the risk of causing abnormalities in the progeny. Apart from the obvious animal welfare considerations, it would not be in the best interests of breeders to run the risk of creating puppies with defects.
The hon. Member for Hexham was right to say that there are safeguards, especially in connection with the breed societies and the Kennel Club, which are perhaps the best bodies to deal with the situation. I can remember a constituency case some years ago that involved such issues, including determining the precise breed of a dog. It was satisfactorily resolved in the end by bringing the breed society and the Kennel Club into the equation.
My experience in such matters is that if one can achieve good voluntary regulation, such as that provided by the breed societies and the Kennel Club, that is better than over-heavy regulation, especially when some of the offences could be serious. I therefore hope that the right hon. Gentleman, even if he is not entirely reassured by my words of wisdom, will accept that the proposed new clause would be inappropriate.

Mr. Maclean: We are almost there. I have listened carefully to the Minister and to my hon. Friend the Member for Hertsmere (Mr. Clappison), and I accept the deficiencies in the new clause. I accept the difficulties in requiring that a veterinary surgeon must determine that both the bitch and sire are in a fit state for breeding. Even if the somewhat loose terminology were right, it would impose the awful regulatory burden of checks on every occasion and that was not my intention.
I wanted to address the problem of congenital defects, and the Minister may have given me a clue. Under the Breeding of Dogs Act 1973, in determining whether to grant a licence for the keeping of a breeding establishment for dogs, the local authority shall
in particular (but without prejudice to their discretion to withhold a licence on other grounds) have regard to the need for securing that the dogs will … be kept in accommodation suitable as respects

construction, size of quarters … lighting, ventilation and cleanliness … that the dogs will be adequately supplied with food, drink and bedding material … and"—
this is the important point—
all reasonable precautions will be taken to prevent and control the spread among dogs of infectious or contagious diseases".
We know what sort of diseases the Act means.
Clause 2 of the Bill would give the Minister a regulation-making power and the solution to the congenital defects problem might be for the Minister to make regulations permitting the local authorities to withhold licences, or to add the condition that the owners of the breeding establishments should operate the voluntary schemes run by the Kennel Club and the British Veterinary Association. I have all the details of those schemes for dealing with the eye defects and the hip and elbow dysplasia defects. I do not want an answer from the Minister today, and perhaps the issue could be addressed in the other place.
Hundreds of other congenital defects might be more difficult to detect. My new clause would cover all congenital defects that might need more than a vet with an ophthalmoscope to discover them, such as expensive x-rays. Through the licensing route, it might be possible for the Minister to give powers to the local authorities to insist that breeding establishments operate the congenital defects schemes. I hope that the Minister will bear that point in mind as a possible avenue—without destabilising this Bill—to giving more impetus to dealing with the ghastly congenital defects that have been bred in some dogs, in some cases deliberately. With those observations on the kind responses from the Minister and my hon. Friend the Member for Hertsmere, I am happy to beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 1

INSPECTION AND REPORT BEFORE GRANT OF LICENCE

Mr. Clappison: I beg to move amendment No. 1, in page 1, line 15, leave out 'may' and insert 'shall'.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 11, in line 22, at end add
`and shall make the report available for inspection by the applicant'.
No. 2, in line 22, at end add—
`(2C) Any report published under subsection (2B) above shall take account of records kept by the breeding establishment.'.
No. 12, in line 22, at end add—
`(2C) No inspection shall involve the taking of photographs of any premises without the prior consent of the owner.'.

Mr. Clappison: As I have said, the welfare of breeding bitches and their puppies is at the heart of the Bill. As the Bill stands, on receipt of an application for premises that have not previously been licensed, the local authority must arrange for an inspection by a veterinary surgeon or a practitioner. That is an advance on the position under existing legislation.
As the Bill stands, in other cases—such as when the premises have previously been licensed and the holder of the licence is applying for a renewal—the local authority


has a power, but not a duty, to arrange an inspection by a veterinary surgeon or practitioner. It has a duty to arrange an inspection by a veterinary surgeon or practitioner on the first application for premises not previously licensed, but if the application is for renewal, there is a power to inspect, but no duty. The amendment turns that power into a duty. The local authority would have to arrange an inspection in those cases. The amendment strengthens the Bill, catering for cases that might arise and strengthening animal welfare provisions. It is worth while, and I am glad to have the support of my right hon. Friend the Member for Penrith and The Border (Mr. Maclean).
Amendments Nos. 11, 2 and 12 have worthy objectives, but I fear that cannot support them as strongly as amendment No. 1. In general, the amendments tabled by my right hon. Friend the Member for Penrith and The Border are too prescriptive. Amendment No. 11 would require a report of an inspection made by a local authority and a veterinary practitioner to be made available to applicants in all cases. The requirement in amendment No. 2 that those who carry out inspections should take account of the records of breeding establishments in every report and inspection is also too prescriptive.
Amendment No. 12 is too prescriptive in another direction, in that it prevents any inspection involving the taking of photographs on premises without the owner's prior consent. I am curious about that amendment, but feel that it would be too prescriptive.
I commend amendment No. 1 to the House as it would be an important step forward and a further important provision in safeguarding the welfare of breeding bitches and puppies.

Mr. Oliver Heald: The Opposition support the Bill. We see inspection of premises as lying at the heart of the Bill and the improvement of the welfare of dogs and puppies in commercial breeding establishments. Anyone who has been a dog owner—I own one—will have been disgusted by reports of dogs and puppies being kept and bred in the most appalling surroundings. That is why the Bill is welcome, and the rules for inspection of premises particularly so.
We support amendment No. 1 because of a weakness in the Bill. Under the Breeding of Dogs Act 1973, licences are issued for only one year, and the existing Bill would allow an authority to reissue a licence without reinspecting premises. Circumstances in a breeding establishment can change markedly in 12 months, and the amendment would ensure that all of them were inspected at least once a year. Without it, an authority may be tempted—perhaps because of lack of resources—to neglect to inspect premises. That might allow an unscrupulous and cruel owner to continue with unsatisfactory practices.
The Opposition support amendment No. 1, but I agree with the comments made by my hon. Friend the Member for Hertsmere (Mr. Clappison) about the other three amendments.

Mr. Maclean: I shall speak briefly about amendments Nos. 11, 2 and 12 and the one moved by my hon. Friend the Member for Hertsmere (Mr. Clappison). Under the

Breeding of Dogs Act 1973, licences are issued for a year. The law allows a local authority to reissue a licence without inspecting premises. I take the point made by my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) that circumstances can change considerably over 12 months. Amendment No. 1 would ensure that all establishments were inspected at least once a year. Without that provision, a local authority might be tempted to concentrate on other priority areas.
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On the other hand, I am conscious that I do not want to put an undue burden on local authorities. I am also conscious that, while I support the amendment moved by my hon. Friend the Member for Hertsmere—I hope that the Minister will say that it is acceptable and all the groups concerned will be happy with it—which is worthy and which I would be happy for it to be pressed, I am not sure whether it is worthy enough if it ends up destabilising the legislation. I will leave it to the Minister to conclude whether it is acceptable in those circumstances.
Amendment No. 11, which is in my name alone, is a probing amendment, as are amendments Nos. 2 and 3—I do not intend to press them against the wishes of the Minister or those of my hon. Friend. Amendment No. 11 would make the report available for inspection by the applicant. I am sorry if it is too prescriptive—it was intended simply to be fair.
At present, no provision exists for applicants to inspect reports on their establishments, but under section 1(5) of the Breeding of Dogs Act 1973, if applicants are aggrieved by the refusal to grant a licence they may appeal to a magistrates court. Surely it makes sense for applicants to have access to a report that rules against them being granted a licence so that they can mount a suitable defence. By having access to the report on his property an individual would be able to make suitable improvements to the establishment to tackle any problems. He would therefore be in a position to make a successful application for a licence the following year.
In the spirit of open government that this Minister and other Ministers espouse, I should have thought it only fair that any person whose property is being inspected—in many cases, property that is not on some separate industrial site but is close to the home, as many kennels are attached to the house or are in the garden—should have access to the report, especially as the inspection will probably include the back kitchen of the house.
I hope that that suggestion will be taken on board in that spirit for people who are refused a licence. I accept that the provision might be too prescriptive if every person who was granted a licence could demand to see the report. If someone is refused and has the right of appeal, it seems fair that he or she should have a copy of the report on which the rejection was based.
Amendment No. 2 states that any report should take account of records kept by the breeding establishment. Those records must clearly display the breeding lines of puppies sold, which would enable vets to check that a breeder is not employing excessive line breeding, which we discussed earlier. The records should also include written confirmation from vets that bitches had been certified as fit to breed prior to mating. I will not press that amendment as I would have to go over similar ground to that covered on an amendment that I withdrew earlier.


Amendment No. 12 concerns taking photographs of premises without the prior consent of the owner. In many cases, kennels are attached to or in the garden of someone's house in the country or on the edge of a town. We are not talking about property on an industrial estate. I suspect that the kitchen where the dog and puppy food is made will be the kitchen of the house, although there may be separate storage facilities. In many cases, the premises are more closely integrated with the residential home than is the case with other industries.
I do not feel too strongly on the matter and am simply floating the idea that if someone from the local authority decides to take photographs he might be photographing someone's home and gardens. Hon. Members may say, "So what? If people are in the business of dog breeding and a report has been made against them, the authority should have the right to photograph anything it likes." That may be a legitimate point.

Mr. Dismore: Surely photographs are likely to be taken when those carrying out the inspection want evidence of malpractice or a poor standard of premises to attach to their report. In those circumstances, the amendment would give the dog breeder a right of veto over the collection of that evidence.

Mr. Maclean: The hon. Gentleman has a strong point. I would not want my amendment to rule out collecting important evidence because photographs were banned. I have not been able to phrase my amendment in a better form that would allow some rights to privacy to people in their homes. I do not want it to be a veto on the collection of evidence against people who should be disqualified or have criminal action taken against them. That is why I prefaced my remarks by saying that I do not feel too strongly about the point, but I thought that it was worth floating. I am glad that the intervention of the hon. Member for Hendon (Mr. Dismore) was not longer or he might have persuaded me that the amendment was totally flawed. I leave it there. The other amendments in the group are more important.

Mr. Peter Atkinson: I make a brief plea to allow discretion to local authorities. We had a "may" and "shall" debate earlier. It is wrong for the House to be so prescriptive that local government cannot make its own choices. It is nonsensical for a breeding establishment that is well known and respected in an area to be inspected to such a degree every year. Local authorities should be allowed to make that judgment and issue a licence without inspection. We should all seek to minimise the burden of regulation rather than adding to it without positive gain.
In the same way, I am cautious about amendment No. 11. I am not a lawyer, but, except for the hon. Member for Leyton and Wanstead (Mr. Cohen), I seem to be surrounded by them. The local authority report would have to be confidential because if it were published and given to an applicant for a licence, it would have to be provable. An inspection might take the overall view that there was something wrong with the kennel but not identify a particular item as the cause for refusing the licence. If the applicant decided to go to court to appeal against refusal, the local authority would have to justify its stance. I oppose amendment No. 11.
I have more sympathy with amendment No. 2 because anyone in the serious business of breeding dogs should keep proper records. All those who breed properly

already do. It is certainly a requirement in the breeding of livestock that complete records of progeny and pedigree are kept. I see no reason why a serious dog breeding establishment should not do likewise. The absence of proper records would suggest that an establishment was defective and unsuitable for a licence.

Mr. George Howarth: The Bill provides that a local authority, before granting a licence, can determine whether it considers it necessary to inspect the premises of a person who has previously been licensed in respect of dog breeding premises. Amendment No. 1 would oblige local authorities to arrange for the inspection of such premises by a vet and/or an official before granting a licence. That would be an improvement in that such inspections could only be for the good of animal welfare. For that reason, I recommend that the House accept the amendment.
On amendment No. 11, clause 1 provides that on receipt of an application for the granting of a licence to operate a dog breeding establishment, a local authority may, depending on the circumstances, arrange for an inspection of the premises. A report is compiled about the premises, the applicant and any other relevant matter, and considered before the determination whether to grant a licence. Amendment No. 11 would require the report to be made available for inspection by the applicant. Although I sympathise with the principle behind the amendment, which the right hon. Member for Penrith and The Border (Mr. Maclean) made clear, I am not very happy about the way in which it is proposed to proceed. The amendment would require local authorities to make the report available in all cases, whereas I think it would be more appropriate that they should do so only if that was requested by the applicant. I understand where the right hon. Gentleman is coming from, but the amendment is unnecessary and might even lead to problems for the reasons that have been discussed.
Amendment No. 2 covers a different matter. Clause 2(2)(i) requires that
accurate records in a form prescribed by regulations are kept at the premises and made available for inspection".
The amendment requires that any report of inspections of premises for licensing purposes
shall take account of records kept by the breeding establishment.
Clause 1 includes the requirement that such reports may take account of "any other relevant matter". Records kept by breeding establishments may of course be relevant to considerations of whether to grant a licence. However, as the hon. Member for Hertsmere (Mr. Clappison) pointed out, we do not want to be too prescriptive as to the inspection of premises. If necessary, that could always be brought out in guidance to local authorities. That seems the most appropriate way to deal with any problems that might arise.
Finally, amendment No. 12 would prohibit the taking of photographs of premises during an inspection by a local authority veterinary surgeon without the consent of the owner. I am not aware that local authorities routinely resort to photographing premises as part of their procedure for compiling reports. Such occasions are likely to be most exceptional, and, in those circumstances, there may be good reasons to use that procedure. Again, I would not want to be overly prescriptive as to how a local authority conducts its inspections. The hon.Member for Hexham (Mr. Atkinson),


who is in the Chamber but somewhat peripatetic at the moment, pointed out that a local authority should be able to use a reasonable degree of common sense in deciding what is most appropriate. I would not want to rule out the use of photographs, or to hedge in such use in the way that the right hon. Member for Penrith and The Border may have intended in the amendment.
I hope that the House will accept amendment No. 1 and that the hon. Member for Hertsmere will not press the other amendments in the group, as they are either overly prescriptive or unnecessary.

Amendment agreed to.

Clause 2

LICENCE CONDITIONS.

Mr. Maclean: I beg to move amendment No. 13, in page 2, line 4, at end insert
`and not more than ten years old, unless with specific written veterinary recommendation'.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 14, in page 2, line 9, leave out from 'puppies' to 'and' in line 11.
No. 15, in page 2, line 15, at end insert 'or any potential buyer'.

Mr. Maclean: Amendment No. 14 is the most important in the group as it deals with a particular problem. Time is pressing and my hon. Friend the Member for Hertsmere (Mr. Clappison) is keen to explain the content of the amendments, so I shall leave the argument to him.

Mr. Clappison: As my right hon. Friend correctly anticipated, amendment No. 14 is important. Clause 2 deals with
matters to which a local authority shall have regard in determining whether to grant a licence
to a breeding establishment. It adds to the matters that are included in existing legislation, such as overbreeding by bitches—something to which I have already adverted and which is a frequent cause of complaint. Subsection (g) refers to bitches giving birth to more than six litters. That matter must be considered.
2 pm
Amendment No. 14 deals with a similar point in relation to clause 2(2)(h). As the Bill stands, paragraph (h) creates an exception—it allows bitches to have another litter within 12 months of giving birth to the previous one
where a veterinary surgeon or … practitioner has given written advice that breeding would not be harmful".
Amendment No. 14 removes that exception.
I understand that the British Veterinary Association supports the amendment because, in its view, a vet cannot give an opinion on the suitability of breeding in the circumstances that I have outlined. It is obviously inappropriate to leave in the Bill the exception based on the vet's written advice if the British Veterinary Association takes the view that a vet cannot give such an

opinion. It must be right to remove that exception. To do so does not weaken the Bill; in fact, it may well strengthen it.

Mr. George Howarth: First, I deal with amendment No. 13. In considering whether to grant a licence to a dog breeding establishment, a local authority is required to have regard to criteria set out in section 1(4) of the Breeding of Dogs Act 1973, and to include such criteria in the licence. The amendment would require that bitches are not mated if they are more than 10 years old, unless on the written recommendation of a vet.
Secondly, although the Bill requires that bitches are not mated if they are less than one year old, the amendment would allow bitches that are less than one year old to be mated only on the written advice of a vet. We understand that the British Veterinary Association's stance on these matters is that the vet cannot give an opinion on suitability for breeding, as anything could happen after clinical examination, which might lead to litigation.
Amendment No. 14 deals with clause 2(2)(h), which requires that bitches do not give birth to puppies within 12 months of a previous litter
except where a veterinary surgeon or … practitioner has given written advice that breeding would not be harmful".
The effect of the amendment would be to remove the exception whereby, on veterinary advice, bitches can give birth within less than 12 months of a previous litter.
I understand that the British Veterinary Association strongly supports the amendment, on the grounds that the vet cannot give an opinion on suitability for breeding. The BVA considers that anything could happen after the clinical examination, and that that might lead to litigation. I therefore believe that amendment No. 14 is reasonable, and urge the House to accept it.
Amendment No. 15 would enable any prospective purchaser of a dog to inspect records kept by the breeding establishment. The purpose of the keeping of records by breeding establishments is to help local authorities and vets to verify that the licensing conditions are being met. Although some businesses may wish to disclose the records to their customers, they should not have an obligation to do so. Some information—for example, on turnover—may be commercially sensitive. Therefore, I do not believe that it would be appropriate to support amendment No. 15.

Mr. Maclean: I am grateful for the Minister's words. I am pleased that we are making good progress. It would make sense to pass amendment No. 14. In view of the Minister's assurances, I should be delighted if we voted on it.
I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 14, in page 2, line 9, leave out from 'puppies' to 'and' in line 11.—[Mr. Clappison.]

Clause 4

IMPRISONMENT FOR KEEPING UNLICENSED ESTABLISHMENT ETC.

Mr. Maclean: I beg to move amendment No. 16, in page 3, line 1, leave out '4' and insert '5'.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 3, in clause 5, page 3, line 31, after 'person', insert 'within a specified timescale'.


No. 4, in page 3, line 33, after 'dog', insert 'and connected expenses'.
No. 20, in clause 9, page 7, line 46, leave out '4' and insert '5'.
No. 7, in page 8, line 21, after 'person', insert 'within a specified timescale'.
No. 8, in page 8, line 23, after 'dog', insert 'and connected expenses'.
No. 9, in page 8, line 23, leave out 'time to' and insert `the'.

Mr. Maclean: I shall not speak to amendment No. 16 or the other amendments in the group, except to say that I should like to hear the views of the Minister and of my hon. Friend the Member for Hertsmere (Mr. Clappison) on amendment No. 9, which may be the most important in the group.

Mr. Clappison: Amendment No. 9 clarifies and improves the wording of the Bill. It strengthens the penalties imposed on those who fall foul of the law relating to breeding establishments. When a person is convicted of an offence in respect of a breeding establishment, the court may disqualify him from having custody of a dog. That person may be required to relinquish custody of the dog and to pay its care charges while permanent arrangements are made for it. The amendment clarifies the wording regarding the charges and makes the position much more plain.

Mr. George Howarth: Amendments Nos. 16 and 20 would increase the maximum level of fine for the offence of keeping an unlicensed dog breeding establishment from level 4, which is £2,500, to level 5, which is £5,000. I believe that that is a disproportionate increase, and I hope that the right hon. Member for Penrith and The Border (Mr. Maclean) will agree.
Amendment Nos. 3 and 7 relate to clause 5(1), which provides for the court to disqualify an offender from having custody of any dog of a description specified in the court order. As an order may require any person who has custody of a dog to deliver it to a specified person, the effect of the amendments would be to allow the court to specify a time scale for delivering the dog. A court expects its orders to be complied with, so it should not be necessary to state a specific time scale in each case.
Amendments Nos. 4 and 8 refer to clause 5(3) and provide that, when a court orders a person who has custody of a dog to deliver it up, it may also require the offender to pay for the care of the dog until permanent arrangements are made for that care. The amendments would require the offender to meet connected expenses, but we believe that the offender should pay only for the care of the dog.
Amendment No. 9 is a technical amendment arising from a typographical error, which I am sure the right hon. Gentleman will be delighted to hear we wish to correct. I therefore recommend that the House accepts amendment No. 9.

Mr. Maclean: We are making excellent progress, and I am glad that I have been able to amend the Bill considerably. I am delighted that the Minister has accepted amendment No. 9.
I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9

PENALTIES

Amendment made: No. 9, in page 8, line 23, leave out `time to' and insert `the'.—[Mr. Maclean.]

Order for Third Reading read.

Mr. Clappison: I beg to move, That the Bill be now read the Third time.
The Bill's primary aim is to improve the welfare of dogs and puppies kept in commercial breeding establishments. It strengthens the existing law and closes some loopholes. I believe that it will make a material difference to the welfare of bitches and puppies in breeding establishments, particularly in some large establishments. Many large breeding establishments keep dogs in satisfactory and reasonable conditions, but some do not. The Bill will tackle that latter group. Breeders will be subject to stronger and tighter legislation, better inspections with animal welfare at their heart and several important considerations regarding the welfare of bitches and puppies. Those measures, which will be enforced through an inspection regime, will address the particular problems of overbreeding and breeding too young.
As my right hon. Friend the Member for Penrith and The Border (Mr. Maclean) said, the Bill is the result of patient, hard and careful work by a number of people and organisations. I have paid tribute already to the 11 that have been involved in bringing forward the Bill. I pay a warm and sincere tribute to the outstanding work carried out by Baroness Wharton in support of the Bill and in support of animal welfare generally. Tribute should also be paid to Barry Huckle of the Pet Care Trust, who gave us much support and a large amount of his time in supporting the Bill.
I thank those who sponsored and supported the Bill. I thank especially my hon. Friends the Members for North Thanet (Mr. Gale) and for East Worthing and Shoreham (Mr. Loughton), and the hon. Member for Basildon (Angela Smith), who has taken a significant interest in the Bill as chairman of the all-party animal welfare group. I should mention also the hon. Member for Weaver Vale (Mr. Hall), who in many respects pioneered the way for the Bill with a similar piece of legislation last year.
There are many dog owners and pet lovers in the House, and I know that there is widespread all-party support for the aims of the Bill. It is my sincere hope that the Bill will make a material difference by enabling us to tackle the problems that cause concern to so many members of the public, including the unfortunate people who have the experience of buying puppies that are unhealthy or suffering from congenital defects. It will help to do away with the terrible conditions in which puppies are sometimes kept in the sort of breeding establishments to which I have referred. These problems rightly cause concern to members of the public, and I hope that through the Bill we will be able to address them by tackling the abuses, bringing to an end the suffering of animals in the establishments that cause concern, promoting the welfare of bitches and puppies and doing our bit as a dog-loving nation.

Mr. Harry Cohen: I shall keep my remarks relatively short. I am a supporter of the Bill, and I want to see it make progress.
I pay tribute to all those to whom the hon. Member for Hertsmere (Mr. Clappison) referred and to him for steering the Bill through the House. He has done a very good job. The Bill is an improvement on the Breeding of Dogs Act 1973 in a number of respects. For example, it will stop overbreeding and under-age breeding. It will provide for better inspection and increased veterinary powers. It will require more accurate records to be kept, along with compulsory identification for traded dogs. It will introduce new rules for the sale of dogs at pet shops and through dealers, and there will be new penalties for misrepresentation. All these things are very welcome.
There has been a call for such legislation. In 1996, the all-party parliamentary group for animal welfare referred to the reasons for concern. It said:
The large scale breeding and sale of dogs for commercial purposes causes a number of welfare concerns; puppies are often taken from their mothers too early; dogs are kept in cramped or unsuitable conditions; bitches are bred too often, making them more likely to produce unfit puppies with health problems; dogs are often given insufficient exercise or human contact and the long distance transportation of puppies can cause health problems.
It is crucial that there is a much better staffing ratio. The RSPCA found one elderly woman looking after 120 dogs. Puppies need human contact at a crucial stage in their development; otherwise they are likely to be untamed. That is cruel because they become unmanageable and have to be put down.
I am pleased about the provision to limit the number of litters per bitch to six. There will be records kept on that. The offspring of litters after the sixth are likely to be sickly, and the bitch will be likely to suffer ill health. It is cruel for both the puppies and the bitch. There will be a cost to the purchaser in the form of high vet bills. Unfortunately, there might be a tendency to put the bitch down after the sixth litter. I hope that that will not be the case and that efforts will be made to find homes for them. Nevertheless, the Bill's provisions in this respect are certainly better than current ones.
I have four other concerns. First, in a previous Parliament, the former Liberal Democrat Member, Diana Maddock, when promoting a similar Bill, claimed that some owners, to avoid inspection, took puppies into their own homes. I do not think that this Bill will deal with that problem. Although we all respect the need to protect civil liberties, we should give a little more power to inspectors in order to close that loophole.
My second concern relates to the selling of puppies at market stalls, in the street or at auction. I shall not deal with the comments of the RSPCA working group on the problem, except to say that it identified a problem with the definition of "a business". If people only occasionally make such sales, they are not considered to be operating a business and are, therefore, not caught by current legislation. The Bill does not seem to deal with the matter, which therefore requires further consideration.
Thirdly, the point has rightly been made that all puppies should have a microchip implant. I strongly agree with that. We are perhaps moving towards requiring all pets to have implants. If so, I favour it. The Home Office should consider phasing in such a policy.
Finally, as I have argued in the past, there is a case for giving RSPCA inspectors policing powers. Although local authorities have a role in monitoring and enforcement, some of them may be interested only in licence fees. The RSPCA is already playing an important role in dealing with animal cruelty, and its inspectors should have policing powers in fulfilling that role.
I support the Bill—on which I congratulate the hon. Member for Hertsmere.

Mr. Heald: I congratulate my hon. Friend the Member for Hertsmere (Mr. Clappison) on the way in which he has conducted the Bill's passage. The Bill rights a wrong, will improve the welfare of dogs, and is supported by the Opposition.

Mr. David Heath: The Bill has all-party support—that of Liberal Democrat Members included—and I join the hon. Gentleman in congratulating the hon. Member for Hertsmere (Mr. Clappison) on piloting it this far.

Mr. Heald: I commend the way in which my hon. Friend the Member for Hertsmere has built his coalition and so successfully pushed through the Bill, which I should certainly commend to the House.

Mr. George Howarth: I join the hon. Member for Hertsmere (Mr. Clappison) in paying tribute to some of the people and organisations who are behind the Bill and have supported him so well—especially Baroness Wharton and Mr. Barry Huckle of the Pet Care Trust. The hon. Gentleman himself had good fortune in drawing such a high place in the ballot, and I congratulate him on steering the Bill through to Third Reading without losing any support.
We should perhaps not forget the ever-present right hon. Member for Penrith and The Border (Mr. Maclean), whose amendments, on this occasion, have improved the Bill.
It would be quite wrong not to mention my hon. Friend the Member for Weaver Vale (Mr. Hall), who, 12 months ago, steered his Breeding and Sale of Dogs Bill through to Third Reading, although it failed to become statute. Perhaps—in the prevailing spirit of co-operation—we shall not go back over that ground.
I should also mention the hon. Member for North Thanet (Mr. Gale), who has a long-standing interest in the subject and has long raised the issue. My hon. Friend the Member for Leyton and Wanstead (Mr. Cohen) made a characteristically kindly speech in which he raised some important issues. His speech was partly about the fact that some of those issues are not addressed in the Bill. I shall study his observations to see whether there are any arguments that should be given further consideration.
The Bill has enjoyed remarkable consensus in the House and has been a good job well done. If it completes all its stages in another place and finds its way on to the statute book, as I hope it will, we shall have a workable framework for the breeding of dogs, which must be good.

Mr. Maclean: I am delighted to add my support to the Bill and wish it well in another place, whence it will go in a few minutes. I am grateful for the Minister's kind observation that my contributions today have helped to make it a better Bill. My contributions last year also helped to make a better Bill, because I single-handedly wrecked a Bill with a similar name. That understandably brought about a certain amount of correspondence. I am pleased that my hon. Friend the Member for Hertsmere (Mr. Clappison) has taken the measure up this year and, working with the co-operation of 11 groups, has helped to ensure a better Bill with more consensus. Consensus is not necessarily a good thing in itself, but on this occasion it is the only way to ensure a workable measure.
I blocked last year's measure because there were some flaws in it. It got through the House without a Second Reading debate and was going to be bounced through on the nod with no scrutiny on Report. I thought it wrong that such a contentious measure should be dealt with in that way with no discussion on the Floor of the House.
After I blocked the Bill I was contacted by the Pet Care Trust, which said that it had concerns about the Bill but no one would listen. Justice for Dogs and the National Canine Defence League then both said that, although the Bill was better than existing legislation, they would like something better. The Kennel Club and the British Dog Breeders Council came along and said "Thank God someone blocked that Bill, because it was flawed." They wanted various other measures put in. Having met those groups, I was convinced that the Bill should not go ahead in that state, so I blocked it again on 3 July.
The tragedy at that time was that the RSPCA was behaving despicably on the Bill. It refused to talk to some of the other organisations, suggesting that it knew all about dogs and was the main charity, so it could deal with everything. Some of the other organisations—I shall not embarrass them by naming them and I would probably get it wrong because I cannot remember which they were—were adamant that the previous Bill had flaws because the RSPCA had adopted a highly possessive attitude and would not listen to sensible suggestions for amendment. The new Bill addresses those flaws.
The Blue Cross and the British Veterinary Association then came on board. One of the first decisions of the working group was that it required an independent chairman. I was delighted about that, because as the person who had blocked the previous Bill I would not be regarded on all sides as someone with an independent or neutral view. I also had no track record of knowledge on the subject and we needed someone knowledgeable and independent. Lady Wharton was unanimously suggested to chair the group. I pay tribute to the tremendous work that she has done on getting the Bill to the stage at which it is about to go to her Chamber for consideration.
When I ceased to have any involvement with the Bill there were seven groups involved. There are apparently now 11 in the coalition. It is a tribute to the noble Lady

and to my hon. Friend the Member for Hertsmere that they have managed to keep on board 11 groups when coming up with this compromise measure. The fact that it is a compromise does not mean that the Bill is flawed or inadequate, but it inevitably cannot do everything that every organisation wanted. If it tried to it would be even more contradictory than some of the amendments for which I have been criticised.
The Bill represents a major step forward. It tightens up the conditions in puppy farms and quite rightly introduces the concept of welfare. It involves the veterinary profession and, importantly, an inspection regime.
I should declare that I am an honorary associate of the British Veterinary Association. That is not a paid post; it merely involves reading some of the tremendous amount of information on hip dysplasia and other problems.
I am happy to send the Bill on its way as it is a considerable improvement on the measure of a similar name that was before the House last year, and on the existing legislation. The Minister has given us some good assurances today. We have built some amendments into the Bill and I am delighted to have had a small part in those improvements. The assurances that the Minister gave the House when he listened kindly and courteously to my proposals in new clause 1 will result in better legislation and better implementation and operation of the legislation in due course. The Minister assured us that he would monitor carefully the licensing conditions contained in the Bill and how many applications were granted and refused. He gave the House an assurance that if he was aware that any parts of the licensing regime were going astray, he could deal with that by Home Office guidance.
I do not mind if my point about the licensing conditions is not addressed in another place as the legislation is good in itself, but congenital defects are one of the worst problems in the dog breeding world. Dogs get horrific illnesses not as a result of accidents or because people have abused them or failed to take care of them, but because they have been bred with congenital defects and action has not been taken to stamp that out. If the Minister or his officials can consider using the provisions of the 1973 Act and the licensing conditions that can be imposed on local authorities, we will have taken a tremendous step forward.
It is a good Bill and I am delighted to offer it my support. Once again, my hon. Friend the Member for Hertsmere has piloted through a tricky and contentious measure. No doubt the hon. Member for Leyton and Wanstead (Mr. Cohen) is right to say that there are matters that it does not address. No Bill can cover everything, but at least this one deals with more problems than it leaves out and in that sense it deserves to leave the House with the full backing of all the parties in the House of Commons and I look forward to receiving it back from another place, if necessary improved a little more.

Question put and agreed to.

Bill accordingly read the Third time, and passed.

Control of Residential Hedgerows Bill

Order for Second Reading read.

Mr. Jim Cunningham: I beg to move, That the Bill be now read a Second time.
I am well aware that I have about two minutes to raise a complex subject. My intention is to nudge the Government into producing their own measure as hon. Members do not have sufficient resources to draft proper Bills.
The Bill relates to an issue on which, at first glance, people assume there are no major problems, but it can set neighbour against neighbour, lead to people's liberties being infringed and their health being affected, and often results in court cases.
Last week I met the Minister responsible, who assured me that the Government's proposals should be ready within a couple of weeks. He said that they had taken soundings from a number of organisations including Hedgeline. Individuals have also written to the Government about some of the problems caused by high trees and hedges. One disabled lady was scared to death to leave her home because a burglar had hidden in high trees. Some people are effectively in an invisible prison.
In view of the Government's assurances, I shall not press my Bill but wait to see what they do in the corning weeks. If they take no action, I shall seek to take the Bill further.

It being half-past Two o'clock, the debate stood adjourned.

Debate to be resumed on Friday 23 July.

Orders of the Day — Remaining Private Members' Bills

HARE COURSING BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 21 May.

HEDGES (CONTROL) BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 14 May.

LICENSING (YOUNG PERSONS) BILL

Order read for resuming adjourned debate on Question [16 April], That the Bill be now read a Second time.

Hon. Members: Object.

Debate to be resumed on Friday 21 May.

AGE LIMITS ON HEALTH CARE BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 14 May.

HEALTH CARE AND ENERGY EFFICIENCY BILL

Order read for resuming adjourned debate on Question [23 April], That the Bill be now read a Second time.

Hon. Members: Object.

Debate to be resumed on Friday 14 May.

ACCESS TO ENVIRONMENTAL INFORMATION BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 14 May.

RECYCLING OF HOUSEHOLD WASTE BILL

Order for Second Reading read

Hon. Members: Object.

Second Reading deferred till Friday 23 July.

RESTRAINING AND PROTECTION ORDERS BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 11 June.

PLANNING APPEALS BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 14 May.

BUS FUEL DUTY (EXEMPTIONS) BILL

Order read for resuming adjourned debate on Question [12 March], That the Bill be now read a Second time.

Hon. Members: Object.

Debate to be resumed on Friday 14 May.

PUBLIC HOUSES NAMES BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 14 May.

Orders of the Day — Insolvency (Heritage plc)

Motion made, and Question proposed, That this House do now adjourn.-[Mr. Betts.]

Dr. Rudi Vis: Unfortunately, I cannot be brief, so I shall try to be quick. I will also read out quite a bit of information, as I want the record to be entirely straight in its details of dates, times and names, of which there are a few. I was going to say also that I would not take interventions because I wanted to make sure that the record was full. However, that will not now be necessary.
The debate concerns the regulation of insolvency practitioners, with special reference to Heritage plc. The Government have promised repeatedly to help small businesses to survive and prosper, and I welcome that. However, there are contrasting interpretations of existing legislation. That is particularly the case when it comes to the excesses of the insolvency industry, as practised by the banks and their servants the insolvency practitioners.
Through the greed and questionable practices of those practitioners, operated with impunity, many small and medium-sized companies are needlessly closed; their directors — who frequently have put all their personal assets on the line—thrown out of work; and their families thrown on to the streets to become an extra burden on the taxpayer.
According to figures provided by the Independent Banking Advisory Service, if all banks followed the example set by the Royal Bank of Scotland and separated the roles of reporting accountants and receivers, 44,700 jobs a year would be saved. Meanwhile, the insolvency vultures continue to earn fat fees.
Lord Sudeley referred to the case of Heritage plc, Lloyds TSB and Grant Thornton in the Lords debate of 26 January 1999. Heritage plc was quoted on the London stock exchange. It operated in east London and Manchester, supplying major retailers in the United Kingdom with household articles. It employed more than 100 people, many of whom were disabled. The former chairman, Mr. Jeffrey Lampert, was my constituent until Lloyds TSB succeeded in evicting him and his family from their home.
The case perfectly reflects the unchecked excesses of the sharks to whom I have referred. Before coming to me, Mr. Lampert took the Heritage plc story to the Bank of England, which said, "This should be dealt with by the banking ombudsman." The ombudsman, hearing that the company's turnover was more than £1 million a year, said, "It's not for me, go back to the Bank of England," which then said, "Go to the FSA," which said, "It's not us; we don't consider individual cases. Go back to the Bank of England." The Bank of England had no further comment at that stage.
Mr. Lampert went to the London stock exchange, which referred him to the Department of Trade and Industry D2 prosecutions section, which concluded:
taking account of the code for crown prosecution it is not in the public interest to instruct an officer to conduct an enquiry.
I am satisfied that the statutes are in place, but they are not being interpreted in a way that protects businesses and jobs from the excesses of the insolvency industry.


In December 1996, Mr. Lampert approached Peter Ellwood, currently Lloyds TSB group chief executive, and his approach proved similarly fruitless. Mr. Lampert has personally banked with Lloyds for more than 40 years —truly a case of "Your Life Your Bank", as the soft advertising campaign says. The facts about Lloyds TSB are different from the image that it seeks to create. I have statistics showing that the Independent Banking Advisory Service receives 36 times more complaints about Lloyds TSB's integrity, which is well defined, than about the Midland bank's.
Apart from the fact that Heritage plc was quoted on the London stock exchange, its case is reasonably typical. Heritage banked with Lloyds from its inception and the bank sponsored it onto the London stock exchange in July 1988. As a result of that flotation, as one would expect, Heritage embarked on a series of acquisitions, advised by the bank. Despite what the directors believed was a long, close and mutually trusting relationship, Lloyds TSB suddenly closed down Heritage plc. The only logical reason for that action, which did not emerge until two years later, was to conceal a sting operated with the aid of Lloyds TSB's co-conspirator, the insolvency section of the well-known firm of accountants, Grant Thornton.
As I said earlier, dates are important. Early in 1995, it emerged that Heritage's then financial director, George Raynor, had been acting in a dishonest way with his PAYE. It also emerged that Grant Thornton, where Raynor had personal friends, and which he had appointed as tax adviser to Heritage plc, was aware of the irregularities but had chosen not to tell Heritage. For that reason, and because of his failure to keep a proper sales ledger, Raynor was fired in June 1995. Grant Thornton was fired as tax adviser a little later, in August 1995. At that exact time, the bank began to insist on my constituent giving personal security.
In July 1995, the bank demanded an accountant's report and insisted on using Grant Thornton, despite Heritage's objections. Heritage directors were shown only a draft of that report, and were told that it was to be finalised after figures audited by KPMG were made available weeks later. In fact, the report was finalised by Grant Thornton only four days later. It misquoted the directors and contained damaging conclusions that were not shared with Heritage plc.
Even more sinister is the fact that three weeks later, on 10 August 1995, another concealed report was prepared, to which I shall return later. It contained the conclusion:
the decision to support Heritage is now finely balanced".
The same day that the report was prepared, Mr. Lampert was told by Lloyds TSB how well the bank and Grant Thornton now believed Heritage was doing in overcoming the problems left by Raynor, and Mr. and Mrs. Lampert were encouraged to make an equity investment in the company —that is different from a loan —of £250,000, using money lent to them by Lloyds TSB and secured on their family home. If Mr. Lampert —or any of the other directors —had had sight of the August 1995 report, obviously he would not have agreed to the investment. Even as late as 1998, Lloyds TSB, through its solicitors Hammond Suddard, still denied the existence of the two concealed reports.
One year later, in June 1996, when Lloyds TSB's exposure had been reduced by about £500,000 and it had earned about £250,000 in interest and fees, Mr. Lampert received another immediate call for an additional £125,000 loan. He was unable to meet the bank's timetable —

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sorry to interrupt the hon. Gentleman, but I hope that he can assure me that the matters with which he is dealing are now historic in a legal sense, and that no sub judice question arises from continuing proceedings.

Dr. Vis: Indeed. Thank you for that advice, Mr. Deputy Speaker.
Mr. Lampert could not meet the bank's timetable because he was abroad. Lloyds used the trick that is normal in such circumstances, returned three cheques on important suppliers, and thus changed the cash-flow problem into a cash-flow crisis.
The directors worked on a restructuring plan involving a firm of accountants, which undoubtedly would have insisted on seeing all the reports on the company. Heritage also engaged in merger talks with a supplier. Both those options were put to the bank, and both were rejected without explanation, over the heads of the entire board of Heritage plc.
Lloyds TSB insisted on appointing Grant Thornton as receivers. That was appalling, but it is within the law. It insisted on making an immediate demand on Heritage's overdraft, although the company was within every term of its complex facility letter. That, too, is within the law. The company had only two banking hours to meet that demand, although the bank knew from past experience that Heritage could borrow the money from its customers. To give only two banking hours is within the law, even when the company has a London stock exchange listing.
The restructuring proposal would have benefited all stakeholders by at least £600,000. Heritage, of course, also had several million pounds' worth of intangibles such as good will, the quotation and its tax losses, all of which were immediately lost. The restructuring proposal would have maintained most of the jobs, and the merger would have maintained all the value for all stakeholders as well as all the jobs.
Lloyds TSB does not appear to be subject to the current regulations, and amazingly, Grant Thornton accepted the receivership. It did so in order to hide its misdeeds as reporting accountant. Having previously been the company's tax adviser, Grant Thornton was conflicted from accepting the receivership. That conflict manifested itself when one of Raynor's personal friends, Brian Michael Moritz, a senior partner at Grant Thornton, represented his interests and opinions to the receivers. Even though Raynor was reported to the DTI for unfit conduct, it is arguable that a firm that was not conflicted would have made a more thorough investigation of sales ledger write-off following Raynor's stewardship —a process that Heritage had started before the receivership. In its evidence to the Institute of Chartered Accountants in England and Wales, Grant Thornton admitted not considering it necessary to inform its client, Heritage plc, that its financial director was committing an illegal act. It also withheld the misdeeds from the company's auditors.
Grant Thornton recorded its appointment at 10.30 am on 11 July 1996. Lloyds TSB later claimed that it was not appointed until after 3.24 pm that day. The timing is


crucial, because written confirmation of the merger proposals arrived at 12.20 pm that day. Grant Thornton refused to discuss the matter with Heritage plc directors or legal advisers. The proposal, as Grant Thornton well knew, was dependent on the maintenance of the stock exchange listing, which was lost once its appointment as receivers was announced. If it had waited until after receiving instructions, according to the bank's timing, that proposal could have been properly explored.
Grant Thornton misled the creditors about the restructuring proposal. It also ignored 1995 audited accounts in its meeting with London creditors, moving all of the write-off from Mr. Raynor's stewardship of the sales ledger to the year after he left. That concealed the substantial recovery of the company which everybody had worked so hard to achieve. The Manchester creditors were shown the truth about the recovery.
Initially, Grant Thornton claimed that the two missing reports were sent by courier to the company, but it could not prove that. Subsequently, it claimed that a draft of the second report was sent to Mr. Lampert's house on 9 August 1995, but could not prove it. Finally, Grant Thornton claimed that the report was faxed to his house that evening, but it could not prove it. Two days after the Court of Appeal hearing in November 1998 between Lloyds TSB and Mr. Lampert, Grant Thornton claimed in a letter to the Institute of Chartered Accountants in England and Wales that he must have seen the report because he invested as a result of its findings. That is peculiar, because until early 1998 Lloyds TSB solicitors claimed that the two concealed reports did not exist. That concealment is a clear breach of section 47 of the Financial Services Act 1986. It should concern the House that Grant Thornton believes that it can get away with such actions.
I am told that the Institute of Chartered Accountants in England and Wales has yet to censure insolvency practitioners employed by a major firm. Members of the insolvency industry, by having incestuous relationships with each other, can take advantage of any business that may experience a downturn. In the case of Heritage, that happened a year after the company had begun to recover. At the same time, insolvency practitioners can cover their own and each others' misdeeds. That cannot be right. Business people should not be encouraged to invest in themselves when the insolvency industry can grab that investment with impunity.
What progress has the Insolvency Service made in its review of the various complaints against Grant Thornton? Is my hon. Friend the Minister prepared to launch a thorough investigation into the receivership of Heritage plc? Does my hon. Friend the Minister intend to use his powers to bring charges under section 47 of the Financial Services Act 1986?
I have met Mr. Jeffrey Lampert several times, and have been on the phone to him a lot. I have been in contact with Lloyds TSB and all the parties that I have mentioned today, except the accountants. Mr. and Mrs. Lampert have been to hell and back. Despite that, Mr. Lampert remains jovial and gregarious, a man of great ability. He is an honest family man who will not give up this fight. I wish him and his family well and I will stand by them.

The Minister for Competition and Consumer Affairs (Dr. Kim Howells): I congratulate my hon. Friend on securing this debate, and I have listened very

carefully to his speech. He spoke with great passion and commitment on behalf of Mr. Lampert. I shall try to answer the three important questions with which he finished.
The regulation of insolvency practice and of insolvency practitioners has been a subject of interest to many in and out of the House. It is a great shame that no Opposition spokesman is here for the debate.

Mr. Deputy Speaker: Order. Madam Speaker has made it clear that Adjournment debates are personal debates, raised by an hon. Member and replied to by a Minister. They are nothing more than that.

Dr. Howells: Thank you, Mr. Deputy Speaker. I am chastened, although I am still interested in why there is no one here from the Opposition to hear the debate.
The case of Heritage plc to which my hon. Friend referred has been at the forefront of recent interest in this subject. I would like to say a few words about the regulation of insolvency practitioners as that lies at the heart of my hon. Friend's case. The Insolvency Act 1986 introduced a regulated profession. Under the Act, practitioners may be authorised by recognised professional bodies. Bodies are recognised for that purpose by the Secretary of State, and they include the principal accountancy bodies, the Insolvency Practitioners Association and the Law Societies in England and Wales and in Scotland.
Recognition is on the basis that the bodies have rules to ensure that practitioners have appropriate educational qualifications and experience. They must remain fit and proper to carry out the job. The bodies are responsible for regulation of the practitioners they authorise, but the Secretary of State has a residual licensing function. Officials at the Department of Trade and Industry's Insolvency Service are in close contact with the professional bodies as an essential part of the continuing development of the regulatory process.
In particular, officials visit the bodies to examine their procedures on authorisation, monitoring and handling of complaints. This is intended to be a review of procedures, not decisions in individual cases. The Secretary of State has no power to undertake such a review. Appropriate procedural recommendations are made where there appears to be scope for improvement. The bodies have responded positively to the recommendations, and procedures have been tightened and further controls introduced where necessary.
The Insolvency Service regulation working party recently published a report in which it found no evidence that regulation had been rendered less effective by its being administered by the professional bodies. I am inclined to believe that the working party was largely right on that.
Let me turn to the case of Heritage plc. Mr. Jeffrey Lampert, my hon. Friend's constituent and the former chairman and principal shareholder of the company, came to see officials in my Department's Insolvency Service in February 1998.
As my hon. Friend said, Mr. Lampert had concerns about the actions of Grant Thornton, two of whose partners had been appointed joint administrative receivers of Heritage plc and other companies in the Heritage group. Grant Thornton had previously undertaken financial appraisals of the group on the instructions of its bankers, Lloyds.


Officials explained to Mr. Lampert that the receivers were authorised to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales. His complaints were, therefore, a matter for the institute in the first instance. With his agreement, an outline of Mr. Lampert's complaint and a supporting bundle of papers were forwarded to the ICAEW by my officials.
I do not think that I need to go into all of the details of Mr. Lampert's complaint —I certainly do not have time to do so. Suffice it to say that his concerns included a possible conflict of interest on the part of the receivers and an alleged failure to provide copies of reports to the board of directors. That is precisely the case that my hon. Friend made.
Mr. Lampert's complaint was considered by the ICAEW's investigation committee on 16 March. The committee decided that no prima facie case for disciplinary action had been made out. Mr. Lampert was dissatisfied with that outcome and contacted officials once more. They explained to him, as did the ICAEW, that it was open to him to ask for the committee's decision to be referred to the institute's independent reviewer of complaints. Mr. Lampert has not so far done so but that option, which is the next stage in the procedure, remains available to him.
In the interim, officials have met with representatives of the ICAEW and have looked at the institute's files on the case. This is in no sense a review of the committee's decision. As I said earlier, the Secretary of State has no power to review the decision of a professional body. However, officials examined the procedures and were satisfied that they were properly carried out. They also took the view that the decision reached by the committee was not an unreasonable decision.
Mr. Lampert also contacted the DTI on the separate issue of whether there had been an offence under section 47 of the Financial Services Act 1986. That relates to the alleged failure of Grant Thornton to provide copy reports to the board of directors of Heritage. My Department gave the matter careful consideration, but concluded that there was nothing in the allegation that should be pursued further.
I understand that Mr. Lampert has also been in touch with the Financial Services Authority about the actions of Lloyds bank and, no doubt, the FSA will be considering whether it should be taking any action. My hon. Friend made that case clear.
I have considerable sympathy for the position in which Mr. Lampert finds himself. He has provided Lloyds bank with very substantial personal guarantees. He has pursued his complaints with various agencies with great diligence. If, however, he wishes to pursue his complaint further against the receivers, his only option would appear to be

to ask the institute to refer the matter to the reviewer of complaints. Certainly, I do not see that there is anything further that the DTI can do to help him in this respect.
I wish to raise one further issue. One of Mr. Lampert's areas of complaint is that the partners in Grant Thornton had a conflict of interest, as my hon. Friend clearly illustrated, when accepting appointment as administrative receivers. The possibility of such a conflict where the appointment follows an earlier appointment as investigating accountant has been the subject of previous concern.
The insolvency professional bodies have issued specific guidance to practitioners which, in effect, states that a practitioner will not normally be prevented from taking a subsequent appointment as receiver where the appointment as investigating accountant is by a creditor. However, the guidance also says that the propriety of a subsequent appointment as receiver may be called into question if the circumstances of the initial appointment as investigating accountant are such as to prevent open discussion of the financial affairs of the company with the directors.
Those and other issues concerning the relationship between banks and business customers have been addressed by the British Bankers Association in its March 1997 statement of principles. That statement seeks to show how banks intend to work together with businesses to get the relationship right from the outset and to help if businesses get into difficulties. My hon. Friend made the point that we must examine the rescue culture, and we are considering that carefully to save jobs and to save people from bankruptcy in such situations. The banks are reviewing their experience of nearly two years operation of the statement of principles.
The framework set out in the statement of principles should discourage any notion that the appointment of investigating accountants will inevitably lead to the appointment of that firm — or, indeed, any other firm —as administrative receivers. It is interesting to note that in a recent survey by the Society of Practitioners of Insolvency for the period 1996-97, practitioners reported that the overall business preservation rate for companies in rescue-oriented procedures —receiverships, administrations and company voluntary arrangements —was 59 per cent.
That does not mean that there is any room for complacency. The Government want as many companies as possible to be encouraged to overcome any short-term financial problems that they may experience. That needs to be kept under careful scrutiny. I am glad that my hon. Friend raised this case because it is an object for us to study. He made his case clearly and carefully. We will consider it closely.

Question put and agreed to.

Adjourned accordingly at one minute past Three o ' clock.